Europe Shortens Deforestation Enforcement Delay to Six Months
(Bloomberg) -- The European Union proposed granting companies six months of leeway to comply with its landmark law to curb deforestation across the world, rejecting a longer delay despite industry complaints.
The EU’s Deforestation Regulation aims to tackle the felling of trees associated with imports into the bloc of commodities such as soy, cocoa, coffee, beef and palm oil. Yet it has faced criticism at home and abroad for being too bureaucratic.
The European Commission proposed Tuesday giving large companies six months of relief from sanctions after the law goes into effect at the end of the year. Bloomberg previously reported the changes, which mark a rollback of plans announced last month to delay implementing the rules by a year.
We are “very committed to the objective of fighting deforestation,” Jessika Roswall, the EU’s environment commissioner, told reporters in Luxembourg. But we need to do “things in an effective way so the legislation actually come into force and be effective,” she said.
Both parliament and member states will need to sign off on the changes before the end of the year, and have the right to propose amendments.
In September, Roswall said the delay was necessary because an IT system for companies to comply with the law was unable to cope with the number of requests. Yet she faced push-back in the commission and from companies that had prepared. A six-month adjustment period will be welcomed by environmental activists, alarmed by high rates of deforestation.
“It is clearly preferable to a blunt one-year postponement and it saves the EU the embarrassment of failing to deliver on its signature anti-deforestation law due to an IT malfunction,” Luciana Téllez Chávez, a senior researcher at Human Rights Watch in Brussels, said by email.
The reaction in agricultural markets was largely muted, though cocoa futures rose as much as 2.3% in ICE Futures New York, and the London contract climbed as much as 1.9%. Robusta coffee prices traded higher, while soybeans gained 0.2% in Chicago.
“This is an extremely important development as the mindset in the last few weeks has been that EUDR will not be an issue for another year,” said Jonathan Parkman, head of agricultural sales at Marex Group.
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Following criticism by EU nations that the law was overly-bureaucratic and punitive on the region’s farmers, the commission also proposed loosening obligations on companies to track deforestation further down the value chain. Companies will only have to conduct due diligence at the entry point into the EU market.
The bloc will also simplify regulations to loosen obligations on smallholder farmers, who will have a full year without enforcement. They will only have to do one declaration in the IT system, if they are not already part of an existing EU database. Otherwise they are exempt.
The latest proposal means that efforts to prepare for the new deforestation law won’t be wasted, according to Will Schreiber, director of 3Keel, a sustainability consultancy that advises companies on sourcing.
“What’s important now is for the EU to quickly agree and adopt this limited six-month amnesty to remove all remaining uncertainty from the market,” he said.
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