The EU EUDDR takes effect immediately. Can it prevent deforestation?

The European Parliament and the Council of the European Union have agreed to issue new rules against deforestation and forest degradation for commodities entering its 27 member states. The regulatory agreement called the European Union Due Diligence Regulation (EUDDR) took place in December 2022.

There are seven commodities that are prohibited from entering Europe if they are related to deforestation and forest or land degradation. EUDDR's commodity coverage is soybeans, palm oil, timber, beef, cocoa, rubber, and coffee as well as derivative products, such as leather, chocolate, furniture. EUDDR does not close the scope extended to other commodities.

In a discussion at the EU office in Jakarta, EU Ambassador Vincent Piket said the EUDDR had not applied penalties for deforestation in the past. That is, this rule applies going forward. Tentatively, the rule will come into effect in May-June 2023.

Despite coming into force, the implementation of obligations for operators importing seven commodities and their derivative products into the European Union will only start in December 2024. Especially for small and medium-sized enterprises, Europe will implement it in June 2025.

Vincent Piket said that the background to this rule was made and agreed politically because of the desire of European countries to contribute to the mitigation of the climate crisis. He cited data from the World Food Organization (FAO) which said that in 1990-2020 420 million hectares of forest were lost.

The area of forest loss is greater than the area of all countries in Europe. Deforestation, Picket said, is driving climate change. The IPCC, a panel of UN scientists, said that 11% of greenhouse gas emissions that cause global warming come from loss (deforestation) and damage (degradation) of forests. "As much as 90% of deforestation is triggered by the expansion of agricultural land," he said.

The European Union is a consumer of agricultural commodities related to deforestation and forest degradation. Every year, EU countries import agricultural commodities included in the seven commodities in the EUDDR worth 85 billion Euros.

If implemented, the European Union is estimated to stop the production of greenhouse gases equivalent to 32 million tons per year. "This regulation will increase EU demand for legal trade as well as deforestation-free products and commodities," Picket said.

For the seven commodities in the EUDDR, the EU imports 6.4 million tonnes of palm oil annually or 83.3% of their needs. Wood 8.4%, rubber 6.5%, coffee 1.3%, soybeans 0.1%, and beef 0.1%.

For importers of seven EUDDR commodities and their derivative products, based on this rule, they must meet due diligence. The trick is to declare that imported products are not related to deforestation and forest destruction.

In response to the new regulation, the Indonesian government expanded the Timber Legality Verification System (SVLK). First of all by changing its name to the Sustainability Legality Verification System. Products that must be deforestation-free are not only timber, but extend to non-timber forest product commodities (HHBK) (explanation of the scope of SVLK changes in this link ).

Under SVLK's new rules, an independent assessment and verification agency (LPVI) can audit the certification process in an industry. So far, SVLK's big hole is the opening of conflicts of interest between certification bodies and industry.

The industry, which wants green certificates for the commodities it produces, invites audit bodies to examine the origin of products. However, the work of certification bodies paid for by industry makes them mere green product stamp institutions.

As a result, the certificate becomes a kind of greenwashing. Violations of sustainability and legality become legal until the product reaches the buyer. In response, Vincent Piket established independent supervisory cooperation to prevent conflicts of interest of certification bodies.

This includes monitoring Indonesia Sustainable on Palm Oil (ISPO). If SVLK is a timber legality system and non-timber forest products, ISPO specifically becomes an oil palm sustainability system. Of the 16 million hectares of oil palm plantations, only 7 million hectares have entered ISPO.

According to Piket, SVLK provides an advantage for Indonesia because the system is relatively compliant with the Deforestation Free Law or EUDDR. "The company's competitiveness will increase in the global market as demand for environmentally friendly products increases," he said.

Follow the conversation about deforestation at this link