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Supply Chain

European Parliament Backs Ban On Goods Linked To Deforestation

By Reuters
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European Parliament Backs Ban On Goods Linked To Deforestation

The European Parliament has approved a landmark deforestation law to ban imports into the EU of coffee, beef, soy and other commodities if they are linked to the destruction of the world's forests.

The law will require companies that sell goods into the European Union to produce a due diligence statement and "verifiable" information proving their goods were not grown on land deforested after 2020, or risk hefty fines.

The rules aim to eliminate deforestation from the supply chains of a range of everyday items sold in Europe. It will apply to soy, beef, palm oil, wood, cocoa, coffee, rubber, charcoal, and derived products including leather, chocolate and furniture.

Tackling Greenhouse Gas Emissions

Deforestation is responsible for about 10% of global greenhouse gas emissions that drive climate change, and the landmark law aims to tackle the EU's contribution to this.

"European consumers can now rest assured that they will no longer be unwittingly complicit in deforestation," said Parliament's negotiator on the law, Christophe Hansen.

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Read More: Why Retailers And Consumer Goods Firms Need To Make Sustainability An Imperative

Pushback

The law does not target any one country, but has faced pushback from some that it would affect.

Indonesia and Malaysia, the world's largest palm oil exporters, have accused the EU of blocking market access for their palm oil. The EU is the world's third-largest palm oil importer.

Malaysia has said it could stop exporting palm oil to the EU in response to the law, while palm oil smallholders warn that they cannot comply with its requirement to prove where goods were produced, using geolocation data.

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The EU Parliament approved a deal on the rules, which was agreed by EU negotiators last year.

Brazilian agribusiness group ABAG also bashed the move, saying the South American country - one of the world's largest food suppliers, a major soy, coffee and beef producer - already regulates deforestation under its forest code, allowing some areas to be cleared.

"It was a unilateral move they took without listening to Brazil," ABAG's head Luiz Carlos Carvalho said in an interview, adding his association had been in touch with Brazil's foreign relations ministry to look for ways to dispute the legislation.

Approval Process

The law needs formal approval from EU countries - a process that typically waves through pre-agreed laws - before it can enter into force. Once that happens, large companies would have 18 months to comply, and smaller firms 24 months.

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Companies that fail to comply could face fines of up to 4% of a company's turnover in an EU member state. EU countries will carry out compliance checks to enforce the rules.

Read More: 6 Ways In Which Financial Institutions Can Transform Global Food Systems

News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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