EU Deforestation Regulation (EUDR) Guide

The Deforestation Regulation (EU) 2023/1115 affects a wide range of consumer products and raw materials. The regulation mentions the following commodities and finish products made of the following materials:

• Cattle
• Cocoa
• Coffee
• Oil palm
• Rubber
• Soya
• Wood

More specifically, the regulation requires that the production of listed commodities did not include the deforestation or degradation of forest land. This in turn requires certain documentation, which can be challenging when the products originate outside the EU.

In this interview with Charles Townsend from ForWood Consulting, you will learn the basics of the EUDR and what compliance can mean in practice.

Which materials are covered by the EUDR?

The following six commodities are mentioned:

• Cattle
• Cocoa
• Coffee
• Oil palm
• Rubber
• Soya
• Wood

What is the EU Deforestation Regulation (EUDR)?

Paragraph 12 of the intro to the EU Deforestation Regulation states that:

‘The European Parliament has highlighted that ongoing destruction, degradation and conversion of the world’s forests and natural ecosystems, as well as human rights violations, are linked, to a large extent, to the expansion of agricultural production — in particular by converting forests to agricultural land dedicated to producing a number of high-demand commodities and products.’

The new regulation is designed to address this problem by requiring companies that import to or export from the EU any of 6 key commodities (cattle, cocoa, coffee, oil palm, soya and wood) to prove that no deforestation or degradation of forests since 31/12/2020 is associated with the products.

Does it apply to all wood species?

EUDR is very different from EUTR in that trade timber forms only a small part of EUDR. The focus of EUDR is on deforestation and is not in any way species-specific. The focus is on the geographic location. If the area in question meets the definition of ‘forest’ then it falls within the scope of the regulation.

The only exemption applies to products that are entirely made of 100% reclaimed and recycled material, be that wood or paper. Forest is defined as ‘land spanning more than 0,5 hectares with trees higher than 5 metres and a canopy cover of more than 10%’

What are the general requirements for EUDR?

1. EDUR covers the production’ import and export to and from the EU of six commodities (cattle, cocoa, coffee, oil palm, soya and timber) and products derived from these commodities, and includes land use to produce feedstock for cattle;

2. Companies must prove that the production of the raw material commodity did not include the deforestation or degradation of forest land;

3. Requires upload to an EU Commission database of a Due Diligence Statement confirming low risk BEFORE import or export – Article 4.2. Critically – this will become a requirement of customs clearance;

4. The location of all forests related to the raw material production must be defined to 1 second of latitude and longitude. This is an area about 31m x 32m = 0.1 hectares. Larger forests must have their perimeter fully defined by a series of lat./long. Coordinates;

5. Requirements include proof of free, prior and informed consent by indigenous people connected to the forest;

6. EUDR requires an ‘independent audit function to check the internal policies, controls and procedures’ (Article 11.2b);

7. SMEs and micro businesses are treated differently;

8. Large-scale ‘Traders’ are now treated as ‘Operators’

9. The definition of ‘applicable legislation’ is wider than in EUTR (Article 2 [40] a-h);

10. Requirement for a specific species-related risk assessment is removed;

11. FLEGT licenced timber is ‘legal’ but is not necessarily ‘deforestation free’

12. Scope of EUDR includes tariff codes of chapter 49 – ‘Printed books, newspapers, pictures and other products of the printing industry, manuscripts, typescripts and plans, of paper’

How does the EUDR differ from the EUTR?

EUDR is very different from the European Union Timber Regulation (EUTR). The EUTR is focused only on a range of timber and paper products and requires only that proof be provided that the trees that were harvested to make the products were legally harvested and legally traded through the supply chain.

The scope and focus of EUDR are totally different and much wider in scope.

EUDR is focused on deforestation – defined as ‘the conversion of forest to agricultural use, whether human-induced or not – and on ‘forest degradation’, defined as ‘structural changes to forest cover, taking the form of the conversion of:

(a) primary forests or naturally regenerating forests into plantation forests or other wooded lands; or

(b) primary forests into planted forests;’

EUDR and EUTR comparison

1. Critically – EUDR covers not only timber but also covers five other commodities (cattle, cocoa, coffee, oil palm, and soya) and includes the production of feed used for cattle

2. EUDR includes exports from the EU as well as imports.

3. EUDR requires the upload to an EU Commission database of a Due Diligence Statement confirming low risk BEFORE import or export – Article 4.2.

4. EUDR requires that the location of all relevant forests be defined as 1 second of latitude and longitude. (This is an area about 31m x 32m = 0.1 hectares) Big forests must have the perimeter fully defined by a series of latitudinal/longitudinal coordinates to map a polygon).

5. Requirements include proof of free, prior and informed consent by indigenous people.

6. EUDR requires an ‘independent audit function to check the internal policies, controls and procedures’ (Article 11.2b).

7. SMEs and micro businesses (as defined in EU Directive 2013/34) are treated differently.

8. Requirement for a specific species-related risk assessment is removed.

9. FLEGT licenced timber remains ‘legal’ but is not necessarily ‘deforestation free’.

10. The scope of EUDR extends to include many more customs tariff codes including chapter 49 – ‘Printed books, newspapers, pictures and other products of the printing industry, manuscripts, typescripts and plans, of paper’.

What kind of documents must be collected?

There is a very wide range of possible documentation that might help companies verify to their Competent Authority that the product being placed on the market carries a negligible risk of being derived from a geographical area that was subject to deforestation or forest degradation since 2020-12-31.

Defining the geographical location is critical. The location of all forests must be defined as 1 second of latitude and longitude. This is an area about 31m x 32m, which equals 0.1 hectares.

Big forests must have their perimeter fully defined by a series of latitude and long coordinates, coupled with satellite images demonstrating no conversion of the land use.

The range of possible documentation used to verify the legality of the production of the raw materials used in the final product is large and variable and will depend on the country of origin.

The list might include:

1. Primary processing

2. Evidence of land ownership or contract providing access to land for grazing cattle or for growing crops;

3. Evidence of a contract to harvest the raw material such as a timber concession contract;

4. Evidence of official authorisation to harvest the cocoa, coffee, oil palm, soya or timber; evidence of post-harvest inspections to verify compliance with harvest-related restrictions and other regulations; evidence of payment of official taxes, duties etc.;

5. Evidence of transport permits to remove the product from the place of harvest;

6. Delivery documents issued by the seller to the buyer;

7. Sales invoice issued by the seller.
Secondary Processing

Once the commodity enters the secondary processing supply chain it becomes critical to demonstrate effective tracking of the material through the supply chain. This is to ensure that other material from unknown sources does not enter the supply chain. This is where the chain of custody certification has an important role to play.

EUDR compliance cannot be demonstrated without full supply chain transparency
. Evidence of import duty and VAT payments must also be made available to the Competent Authority.

Are there any labelling requirements?

There are no product labelling requirements and no available labels or marks associated with EUDR compliance.

Are there any registration requirements?

Any company importing or exporting any of the products covered by the tariff codes listed in the Annex to the regulation will need to be registered with the EU customs authorities – as of now.

Has FSC already implemented the EUDR requirements?

FSC and PEFC certification for timber products is a voluntary certification scheme. EUDR will be a mandatory legal requirement. For wood and paper products, FSC and other certification programs will provide valuable evidence to assist with EUDR compliance but none provide a ‘green lane’ through this legislation.

Likewise, for the other commodities, there are no certification schemes that provide proof of compliance, such as Fairtrade.

How can ForWood Consulting help with EUDR compliance?

Companies importing or exporting products within the scope of this regulation need to be fully compliant by the end of 2024, so they need to act now to develop the management systems, processes, supply chain cooperation, data gathering and analysis.

This legal responsibility cannot be delegated, but ForWood Consulting can provide clarification and advice on how to proceed to develop a company-wide, product-specific solution.

Learn more: www.forwoodconsulting.com