Regulation
What EUDR preparations or pauses are underway?
Brussels, do we have a problem with the EUDR? That’s the question Confectionery News posed back in May as the bloc’s director general for Trade called it “extremely burdensome”. It seemed the director’s comments were not a one-time expression of doubt either, as they came mere months after European Union (EU) Commission Policy Officer Zoe Druilhe said there was no ‘plan b’.
Concerns linger about how the new deforestation rules will affect farmers, SMEs and developing countries, along with what the implementation requirements will actually entail.
The EUDR deadline of December 30 2024 for larger companies importing confectionery into the EU edges closer. As it does, markets worldwide are battling between calling for clarity on the regulation and still making strides to improve their readiness ahead of its impending application.
US urges a delay
Back in May, the Biden administration in the US pressed for a delay to the EUDR. It stated that an import ban on confectionery products like chocolate would hit the country’s producers hard, the FT reported in June.
In a letter sent to the European Commission on May 30, US secretaries of commerce and Agriculture Gina Raimondo and Thomas Vilsack and trade envoy Katherine Tai said the deforestation law presented “critical challenges” to US producers. Seven months ahead of its planned introduction, they were therefore calling for its delay.
With the potential adverse effects on producers front and centre, the US government asked that the EUDR’s implementation and any subsequent would-be penalties be put off until the European Commission could overcome these challenges.
The EUDR in brief
- Operators dealing with cocoa and other commodities such as coffee, cattle, oil, palm, rubber, soy, and wood must provide sufficient evidence of non-deforestation in the crops where their products are sourced from as far back as December 31, 2020.
- Products that do not meet the new due diligence requirements are prohibited from commercialization in the EU market after December 30 2024.
Highlighting the EUDR’s “impossible standards”, 27 senators have since said that the new rules amount to a “non-tariff trade barrier”, which could see the $3.5 billion forest product trade between Europe and America stop.
The US is not the only country to ask for a halt to the law coming into force, which will see chocolate traders have to provide documentation to prove their imports did not come at the cost of destroying forests. Significant palm oil producers Indonesia and Malaysia have also expressed their calls for Brussels to hold off bringing the EUDR in at the end of the year, amid these ongoing concerns.
China shares its concerns, too
In July, China became the latest country to oppose the introduction of the EUDR, German timber trade association, GD Holz, reports.
China is reportedly refusing to share geolocational data with the EU on the grounds of “security concerns”, the association states. As China has one of the globe’s largest forest markets alongside the US, pushback from the Asian economy puts even more pressure on the European Commission to respond and update its implementation deadline.
Centring around securing location information, the EU has reportedly confirmed with the Chinese government and suppliers that imports without coordinates are not feasible. It’s said no exceptions will exist for countries where this is expressed as an issue.
Under Chinese law, only entities with special authorisation from the administrative department for surveying and mapping under the State Council can access geographic information.
EMEA wants more time to implement processes
Retailers in Europe are also urging for a delay in its Commission’s law coming into force. On July 25, EU retail group EuroCommerce wrote to the European Commission president, conveying “deep concern” ahead of the EUDR’s imminent arrival. It called for an additional six-month transition period for companies, to enable them to get their IT tools and benchmarking processes ready.
EU trading partners looking after farmers’ rights also want an extra bank of time to help those in agriculture prepare for the deforestation rules. In a letter sent to the European Commission on July 27, The Cocoa Farmers Association of Nigeria (CFAN) asked for a delay, based on a lack of adequate information on the EUDR, European news agency EurActiv reports.
Germany’s BDSI confectionery organisation states that its sector is battling dwindling confectionery exports, with EUDR a possible cause. The country’s challenging economic conditions, including high raw ingredient and energy prices and supply chain struggles, are also to blame. These have led to confectionery exports dropping 0.6% in the first quarter of 2024 after a 1% decline in 2023.
A survey by BDSI found that raw materials, staff, energy and bureaucracy were the leading cost drivers in 2024. Introducing reporting obligations for sustainability and supply chain legislation was at the top of companies’ most significant administrative obstacles.
Vietnam holds preparedness workshop
On July 30, the United Nations Development Programme (UNDP) and the Department of Forestry under the Ministry of Agriculture and Rural Development held a workshop on the EUDR. The event aimed to give the latest information on the regulation and detail the results of Vietnam’s preparedness check, which it carried out nationally and provincially.
Vietnam’s Ministry of Agriculture and Rural Development (MARD) and stakeholders have “proactively aligned” with the EUDR, the UNDP states. It has developed and issued an action plan framework for EUDR Compliance designed to give comprehensive guidance to national and provincial institutions. The framework also aims to help Vietnam develop practical actions that support operators’ due diligence processes and efforts.
During July’s workshop, the attendees held important discussions on data sharing, standardised methodologies for zero deforestation, legality analysis and how it can best support smallholders. The EU funded the workshop as part of the Integrated Sustainable Landscape Management through Deforestation-Free Jurisdiction Project in Lam Dong and Dak Nong, Vietnam.
“The findings of the preparedness check will guide us in strengthening our strategies and actions, ensuring that Vietnam remains a leader in sustainable and deforestation-free production,” says Patrick Haverman, Deputy Resident Representative of UNDP Vietnam. “It is crucial to provide these smallholders with the necessary resources and knowledge to comply with EUDR standards without disproportionately impacting their livelihoods,” Haverman adds.
