Industry groups call for targeted country partnerships and clear guidelines for EU deforestation-free regulation

Following the formal approval of the Deforestation-free Commodities Regulation, COCERAL, FEDIOL, and FEFAC call on the European Commission and member states to work with stakeholders to facilitate the implementation of the regulation. Many implementation challenges remain unaddressed and will require multistakeholder collaboration, involving the European Commission, member states, and producing country government and stakeholders. Furthermore, uncertainties around how the provisions translate in practice should be addressed as soon as possible to allow supply chain actors to prepare for implementation.

COCERAL, FEDIOL, and FEFAC have welcomed the EU initiative to tackle deforestation and supported an EU regulation introducing mandatory due diligence. “As repeatedly highlighted throughout the regulatory process, some of the provisions and the set timeline for implementation will pose significant problems for numerous stakeholders in the supply chains and risk excluding many players in third countries from supplying the EU market, especially smallholder farmers,” they said in a statement.

The regulation will apply to supply chain actors 18 months after entry into force, which is a short timeline considering the serious implementation challenges that need to be tackled, the associations said. “Challenges around the traceability to plot requirement, for instance, have not been properly acknowledged, and solutions must urgently be found at scale to enable compliance.”

According to the statement, practical challenges include:

Obtaining geolocation/polygon to plot data of millions of smallholders who supply mills indirectly through collectors/aggregators: it is a common problem that middlemen do not want to share information about smallholders they buy from for fear of being bypassed. Without their collaboration, smallholders supplying through them will necessarily be excluded from EU supply chains.
Obtaining and maintaining reliable and updated traceability data matching land ownership titles: in the absence of properly regulated land tenure and inadequate national farm registers, sourcing from farmers whose ownership rights, ownership changes, and land lease contract changes are not officially registered would be a risk to operators. Operators cannot comply with the EU’s requirements, which include complying with land use rights under national legislation in producing countries, if such official information is not available or in order.
Resolving data sharing impediments in producing countries: some producing countries consider land ownership data sensitive and prohibit their sharing.

“Overcoming these and other obstacles will require the Commission, member states, producing country governments (including regional and local authorities), operators, smallholders and other local economic actors in the supply chain, and NGOs to work together in synergy. Without this collaboration, operators will not be able to keep certain smallholders in their supply chains to the EU and may not be able to guarantee sufficient volumes at all times,” it said.

“In addition, we and other commodity sectors have been calling for guidelines to provide assurances on which practices are compliant with the regulation. The regulation’s provisions have given rise to many practical questions that have not yet been addressed and which risk delaying efforts to find solutions to enable a successful implementation of the regulation,” it said.

“Given the important resources and infrastructure and logistical changes required by the industry to comply with the segregation and traceability requirements, among others, we urge the Commission to provide legal clarity as well as solutions to avoid excessive disruptions to the functioning of commodity supply chains,” it said. The associations urge the Commission to issue commodity-specific guidelines, as well as guidelines to facilitate the harmonized implementation of the Regulation, by the end of 2023 at the latest.

COCERAL, FEDIOL, and FEFAC offered their support to provide our knowledge and experience operating in complex supply chains to make the implementation of the regulation possible, while minimizing as much as possible any negative impacts, including supply chain inefficiencies, exclusion of smallholders, trade disruptions, supply shortages, a likely negative impact on the cost of living in the EU, and any counterproductive impacts on the fight against deforestation. They support the formation of working groups under the Multistakeholder Platform on Protecting and Restoring the World’s Forests to foster exchanges on best practices and find joint solutions to the implementation challenges. “We continue to stress the importance of tailoring these solutions to each commodity sector and country of origin for any guidelines to be useful and practicable,” they said.