With the entry into force of the new European Union Deforestation Regulation (EUDR) on June 29, 2023, the European Union (EU) took a giant step towards actively contributing to the preservation of forest masses globally.
The new EUDR regulation, published on June 9 in the Official Journal of the EU, aims to minimize the EU’s contribution to global deforestation and forest degradation by promoting sustainable practices in supply chains. It is a fundamental step to reduce the EU’s ecological footprint and contribute to the fight against climate change and biodiversity loss globally, within the framework of the European Green Deal.
This new regulation, replacing the EU Timber Regulation (EUTR), will be applicable within 18 months (starting from December 30, 2024) for large companies and within 24 months (June 30, 2025) for SMEs and micro-enterprises. Thus, the EUTR will be repealed from December 30, 2024, and an exemption will be granted for wood and derived products produced before June 29, 2023, and marketed from December 30, 2024.
Objectives of the EUDR
The main objective of the EUDR is to avoid deforestation or forest degradation by reducing the possibility of importing products that contribute to it. Compared to the EUTR, the new regulation broadens its scope to include sectors such as soya, beef, palm oil, timber, cocoa, coffee, and rubber, as well as their derivatives.
The EUDR establishes due diligence obligations for companies producing, processing, and marketing these products, so as to minimise risk and demonstrate that they do not come from illegally logged areas or have not contributed to forest degradation.
In addition, the EUDR expands the list of affected products to include, among others, wooden furniture, printed books, or charcoal (the complete list of relevant products can be found in Annex I of the Regulation). This implies that companies must comply with rigorous due diligence obligations, verifying the sustainable origin of the products.
In this context, voluntary certification systems such as PEFC, FSC, or others are recognized as promoting good practices and facilitating the risk assessment of supplies. However, the existence of certification does not make the product compliant with the EUDR and does not exempt companies from carrying out due diligence.
EUDR and EUTR main differences
- The EUTR is replaced by the EUDR, which covers a broader range of commodities, including wood, soy, cocoa, coffee, beef, palm oil, and some derivative products.
- Operators will now share due diligence responsibilities with larger commodity traders further down the supply chain. The risk of non-compliance is also transferred down the value chain whereas with EUTR this stopped at the operator level.
- Operators are expected to report geolocation data to trace goods back to their origin.
- Operators will need to expand the scope of their due diligence to include legislation in the country of production, covering sustainable forest management, third-party rights, labour and human rights, as well as relevant tax, anti-corruption, trade, and customs regulations. And openly publish a due diligence report annually.
The key role of European poplar
Undoubtedly, the new regulatory framework poses challenges for the trading of the main forest and agriculture commodities around the World as the level of traceability and complexity is greatly enhanced by EUDR vs EUTR. Under this scenario European poplar stands out as a reliable source of wood in compliance with existing and upcoming regulatory frameworks Currently, there are around 450.000 hectares of poplar forests and plantations in the EU, concentrated mainly in Mediterranean countries such as France, Spain, and Italy.
These forests and plantations are managed locally and sustainably serving as a great example of a highly traceable raw material produced in the European Union that can serve as an alternative to imported goods from questionable origins. Furthermore, poplar cultivation also positively contributes to local economies by generating employment and benefiting rural development. Poplar is a local, efficient, and sustainable raw material production option.
A good strategy
Investing in the renewal of European poplar forests and plantations, to ensure that sustainable poplar-growing practices are maintained, is emerging as a key strategy for achieving the European Union’s objectives and guaranteeing compliance with the requirements of the new EUDR regulation throughout the supply chain.