10 December 2022: For EBBC News, Steffen Kemper (Global Nature Fund) talked about the new EU regulation on deforestation.
Steffen, could you briefly describe what the EU regulation is about and why it is described by many as "groundbreaking"?The regulation aims to impose binding due diligence requirements on companies within the EU. This affects various raw materials and, in some cases, their by-products, such as beef, soy and palm oil, but also wood, coffee, cocoa and, as now agreed in the trialogue between the EU Parliament, Council and Commission, rubber. The aim is not a general trade ban on these raw materials for EU companies, but to effectively exclude deforestation from supply chains. What is special about the regulation is that it will create a level playing field for the EU area and oblige companies (depending on their size and trading level) to be deforestation-free. In view of the fact that voluntary commitments or the use of standards (some of which have very different levels of ambition) have not had the desired effect for many years, an EU regulation with binding requirements is definitely "groundbreaking".
What does that mean for German companies in concrete terms? And especially for SMEs?All "first movers", traders who are not SMEs and traders who are SMEs are affected by the EU regulation. Groups 1 and 2 will have to submit a so-called due diligence statement, according to which their goods are deforestation-free and additionally in compliance with the legal situation applicable in the country of origin (with regard to land use rights, environmental protection, etc.). Deforestation-free or degradation-free goods are those that have been produced on land that has not been deforested or degraded after December 31, 2020. To arrive at this statement, a 3-step due diligence process must be followed: 1. data and information collection, 2. risk assessment, 3. risk mitigation measures. Meanwhile, for distributors that are SMEs, a simplified due diligence process will apply - they will only need to collect information on direct buyers or sellers and report indications of potential violations to authorities. We would be happy to explain the details in a direct exchange.
What challenges do you see for implementation?The biggest challenge is the so-called "geolocation". Who carries this out, who pays for it, and how can the financial and technical possibilities be created, especially for small producers' (organizations) in countries of the global South, to realize this? At the same time, the acquisition of concrete geo-coordinates (where exactly was the raw material produced?) is the crucial element to really ensure, prove and verify freedom from deforestation.
Where can companies get information and what can companies do now to prepare for the regulation?Companies can use various tools to trace their supply chains and eliminate deforestation. There are also some frameworks and guidelines specifically for companies that can be used now in moving to deforestation-free supply chains or preparing for the regulation. A company that is still at the very beginning is best to start by fully mapping its supply chains (or those of the critical raw materials in the regulation) and seeking early contact with its direct suppliers to address the issue. The Global Nature Fund itself is currently working with the tropical forest foundation OroVerde on an information portal for companies, in which such and other information and support offers are bundled and prepared for companies in a raw material-specific manner. A pilot phase for the portal will start in spring 2023.
Interested companies are welcome to contact:
Steffen Kemper (
kemper@globalnature.org) or Lea Strub (
strub@globalnature.org).
Further information on the project "Deforestation-free Supply Chains (ELAN) – An Online Atlas for Corporate Sustainability":
https://www.globalnature.org/en/deforestation-free-supply-chains