European Parliament’s plenary vote on the Commission proposal for a regulation on deforestation-free products. Plenary adopted its position on the Commission proposal with 453 votes to 57 and 123 abstentions.

The new law would make it obligatory for companies to verify, so-called “due diligence”, that goods sold in the EU have not been produced on deforested or degraded land anywhere in the world. This would guarantee consumers that the products they buy do not contribute to the destruction of forests, including irreplaceable tropical forests, and hence reduce the EU’s contribution to climate change and biodiversity loss.

While no country or commodity will be banned, companies placing products on the EU market would be obliged to exercise due diligence to evaluate risks in their supply chain. They can, for example, use satellite monitoring tools, field audits, capacity building of suppliers or isotope testing to check where products come from. EU authorities would have access to relevant information, such as geographic coordinates. Anonymized data would be available to the public.

Industry reaction

Industry associations COCERAL, FEDIOL and FEFAC regret that the outcome falls short of the ambition to tackle global deforestation and risks fueling supply chain shortages and price inflation in the EU.

The associations said in a joint announcement that the approach taken by the European Parliament disincentivizes action against deforestation globally and particularly in high-risk areas due to:

• The requirement of traceability to plot, which is currently not feasible for many smallholders and risks causing their exclusion from supply chains.
• The country benchmarking system, which will lead companies to source away from high-risk areas as part of their risk avoidance strategy.

“The lack of alternatives to traceability to plot for soy and palm products in combination with some of the trade disruptive measures adopted by the European Parliament will most likely affect the availability of these commodities in the EU and thereby contribute to inflationary pressures on these commodities and the food and non-food products that contain them,” they said.

“Given that the European Commission, European Parliament, and Council have not sufficiently considered the practical challenges operators and their suppliers will face when it comes to the proposed traceability and chain of custody requirements, we urge all three institutions to work with supply chain actors to identify solutions to minimize all the foreseen negative impacts. We also stress the need for pilot programs to test the implementation of the proposed requirements across relevant countries in order to identify appropriate solutions against the practical challenges we have previously highlighted,” they concluded.