Fighting deforestation and forest degradation

KEY POINTS

Deforestation and forest degradation are the result of the expansion of agricultural land, which is linked to the production of the commodities covered by this regulation (cattle, cocoa, coffee, palm oil, rubber, soy and wood). As a major consumer of these commodities, the EU can reduce its contribution to global deforestation and forest degradation by making sure these products and their supply chains are deforestation free.

Due diligence

• The regulation’s impact assessment estimates that, without this intervention, the EU’s consumption and production of the seven commodities alone could cause almost 250,000 hectares of deforestation annually by 2030.
• The regulation sets mandatory due diligence rules for operators and traders that place these commodities on the EU market or export them from the EU.
• The rules also apply to a number of derived products, such as chocolate, furniture, printed paper and a range of products derived from palm oil (e.g. used in personal care products).
• Operators are required to trace the commodities they sell back to the plot of land where they were produced.
• The regulation allows for small operators to work with larger operators to prepare due diligence declarations.
• The regulation sets a cut-off date of 31 December 2020, meaning that only products that have been produced on land that has not been subject to deforestation or forest degradation after 31 December 2020 will be allowed on the EU market or to be exported from the EU.
• An information system will be accessible to operators and traders– and, if applicable, their authorised representatives, competent authorities and customs authorities – to implement their respective obligations laid down in Regulation (EU) 2023/1115. The system, which is a software application based on the Traces platform, established under Regulation (EU) 2017/625 on enforcing EU rules for the agri-food chain, is designed to facilitate the transfer of information between EU Member States’ competent authorities and customs authorities. An implementing act, Regulation (EU) 2024/3084, sets out the rules for the operation of this information system, including rules for the protection of personal data and exchange of data with other IT systems.

Product checks

• The regulation includes the creation of a benchmarking system, which assigns a level of risk related to deforestation and forest degradation (low, standard or high) to EU Member States and non-EU countries.
• The category of risk determines the level of obligations for economic operators’ due diligence and Member States’ authorities to carry out inspections and checks, enhancing monitoring for high-risk countries and simplifying due diligence for low-risk countries.
• To verify that they effectively fulfil their obligations, each Member State will have to carry out checks on:
  • 9 % of operators dealing with products from high-risk countries, along with 9 % of the relevant commodities and products placed on, made available on or exported from their market by high-risk countries;
  • 3 % of operators dealing with products from standard-risk countries;
  • 1 % of operators dealing with products from low-risk countries.
• The EU will enhance cooperation with partner countries, in particular those classified as high risk.

Human rights

The rules also take into account protecting human rights related to deforestation respecting the principle of free, prior and informed consent of indigenous peoples.

Penalties

The regulation includes rules on penalties, which Member States should ensure are effective, proportionate and dissuasive. These penalties should include, among other things, fines proportionate to the environmental damage and the value of the commodities or products, which must be set at a level of at least 4 % of the operators’ annual turnover in the EU, and temporary exclusion from public procurement processes and/or from access to public funding.