EU publishes deforestation commodity law

Cattle, cocoa, coffee, oil palm, soya and wood commodities and products will be subject to due diligence requirements under a draft legal proposal published by the European Commission today. The regulation, if adopted, will apply in all EU countries and will ban the sale and export or re-export of these commodities if they are linked to deforestation.

The proposed regulation combines due diligence requirements with a country benchmarking system for deforestation and forest degradation linked to the listed commodities. The commission will also take into account a country's "engagement" in fighting deforestation and forest degradation. Due diligence obligations for operators and member state authorities differ according to whether countries are categorised as of low, standard or high risk.

The commission has set a cut-off date after which the commodities and products covered by the regulation will not be allowed to enter or exit the EU market if produced on land subject to deforestation or forest degradation after 31 December 2020. The regulation also contains a geographic information obligation whereby operators must collect the co-ordinates of all plots of land where the relevant commodities and products were produced.

EU member states would also have to sanction operators and traders with "effective, proportionate and dissuasive" penalties. The published final draft of the regulation notes that the maximum amount of fines will be at least 4pc of the operator's or trader's annual turnover in the member states concerned. Non-compliant traders will face confiscation of the relevant commodities and products, confiscation of revenues and temporary exclusion from public procurement processes.

The final version of the regulation widens the scope from a leaked draft. It now catches cattle rather than just beef, and it stretches the list of products to edible offal of cattle as well as leather. Cocoa is expanded to include powder, as well as chocolate and other food preparations containing cocoa.

In addition to palm oil, whether or not refined, the commission is targeting further derived palm products. Similarly, the commission has added soya-bean oilcake and other residues to the targeted soy products, including soya beans, flours and meals of oil seeds as well as soya-bean oil, whether or not refined. The regulation continues to target wood and "fuel wood", whether it be logs, twigs, chips, briquettes or pellets.

EU environment minister Virginijus Sinkevicius said the list of deforestation products can be expanded in the future. While soy is included in the deforestation regulation, European Commission vice-president Frans Timmermans has not confirmed whether it will be included alongside palm oil under a 2019 EU renewable energy law as a product at high risk of indirect land-use change.

"You have to be fair and not just look at palm oil," Timmermans told Argus. "You have to look at a broader scope of commodities."

By Dafydd ab Iago