Fighting deforestation and forest degradation

SUMMARY OF:

Regulation (EU) 2023/1115 on the making available on the EU market and the export from the EU of certain commodities and products associated with deforestation and forest degradation

WHAT IS THE AIM OF THE REGULATION?

The regulation sets out binding rules for European Union (EU) operators and traders that place on the EU market or export from the EU wood, rubber, cattle, coffee, cocoa, palm oil and soy, with the aim being to:

minimise the EU contribution to global deforestation and forest degradation; and
reduce the EU contribution to greenhouse gas emissions and global biodiversity loss.

The regulation is part of the EU’s biodiversity strategy for 2030, the EU’s new EU forest strategy for 2030 and the European Green Deal.

KEY POINTS

Deforestation and forest degradation are the result of the expansion of agricultural land, which is linked to the production of the commodities covered by this regulation. As a major consumer of these commodities, the EU can reduce its contribution to global deforestation and forest degradation by making sure these products and their supply chains are deforestation free.

Due diligence

The regulation’s impact assessment estimates that, without this intervention, the EU’s consumption and production of the six commodities alone could cause almost 250,000 hectares of deforestation annually by 2030.
The regulation sets mandatory due diligence rules for operators and traders that place on the EU market or export from the EU market the following commodities: palm oil, cattle, wood, coffee, cocoa, rubber and soy.
The rules also apply to a number of derived products, such as chocolate, furniture, printed paper and a range of products derived from palm oil (used in personal care products, for example).
Operators are required to trace the commodities they sell back to the plot of land where they were produced.
The regulation allows for small operators to work with larger operators to prepare due diligence declarations.
The regulation sets a cut-off date of 31 December 2020, meaning that only products that have been produced on land that has not been subject to deforestation or forest degradation after 31 December 2020 will be allowed on the EU market or to be exported from the EU.

Product checks

The regulation includes the creation of a benchmarking system, which assigns a level of risk related to deforestation and forest degradation (low, standard or high) to EU Member States and non-EU countries.
The category of risk determines the level of obligations for economic operators’ due diligence and Member States’ authorities to carry out inspections and checks, enhancing monitoring for high-risk countries and simplifying due diligence for low-risk countries.
To verify that they effectively fulfil their obligations, each Member State will have to carry out checks on:
- 9% of operators dealing with products from high-risk countries, along with 9% of the relevant commodities and products placed, made available on or exported from their market by high-risk countries;
- 3% of operators dealing with products from standard-risk countries;
- 1% of operators dealing with products from low-risk countries.
The EU will enhance cooperation with partner countries, in particular those classified as high risk.

Human rights

The rules also take into account protecting human rights related to deforestation respecting the principle of free, prior and informed consent of indigenous peoples.

Penalties

The regulation includes rules on penalties, which Member States should ensure are effective, proportionate and dissuasive and include, among others, fines proportionate to the environmental damage and the value of the commodities or products, which must be set at a level of at least 4% of the operators’ annual turnover in the EU, and temporary exclusion from public procurement processes and/or from access to public funding.

FROM WHEN DOES THE REGULATION APPLY?

The regulation has applied since 29 June 2023. Some provisions apply from 30 December 2024 (or 30 June 2025 for micro, small and medium-sized undertakings established before 31 December 2020).

BACKGROUND

For further information, see:

Guidelines on biodiversity-friendly afforestation, reforestation and tree planting (European Commission)
3 billion trees (European Commission)
Nature and biodiversity (European Commission).

MAIN DOCUMENT

Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010 (OJ L 150, 9.6.2023, pp. 206–247).