Seeing The Forest For The Trees
The latest on EU's pioneering anti-deforestation law
First off, thanks to everyone who responded to last week’s issue by sending me the copy of a report I couldn’t find online and offering to help me report further on this topic. I look forward to writing more on seeds and farmers’ rights.
Still, 2024 is ending on a very disappointing note: with negotiations to tackle plastic pollution ending without an agreement, we are now 3 for 3 when it comes to being let down by multilateral discussions on some of the world’s most pressing issues. In case you don’t remember, the biodiversity and climate talks also ended as damp squibs.
Yes, progress was made on some fronts, but it feels like we are taking slow, incremental steps when our efforts and commitments and ambitions should be transformative.
One semi-bright note this week is the EU deforestation regulation, which is going to be delayed by a year (not bright), but will at least not be stymied from the get-go by loopholes so big it almost renders the law toothless (bright). So I’m going to focus on that.
On April 19 2023, the European Parliament overwhelmingly voted - 552 votes in favour, 44 against, and 43 abstentions - to adopt the EUDR, a landmark anti-deforestation legislation.
It requires companies working in seven commodities that drive deforestation - cattle, cocoa, coffee, palm oil, rubber, soy and wood as well as some of their derived products like leather, chocolate, and furniture - to show their products don’t come from deforested land or areas affected by forest degradation.
The EUDR came into force on Jun 23, 2023 and businesses were told to apply its provisions by December 30, 2024, while small and micro enterprises got an extra six months, with a June 2025 deadline.
Under the regulation, a benchmarking system will classify countries into three tiers: high risk, standard risk and low risk, based on a number of criteria including the rate of deforestation and forest degradation, and the rate of expansion of agricultural land for relevant commodities, .
If you want to know more, Carbon Brief has a good primer on the law.
Earlier this year, I wrote about concerns that smallholder farmers may be unfairly and unwittingly penalised under the EUDR. I spoke to Elizabeth Teague, Senior Director of Climate Resilience at Root Capital, an impact investor and a member of a coalition helping smallholder farmers profit from adapting to climate change.
A Hollywood-worthy Plot
During and after that April 2023 vote, lawmakers championed the law, including members of the European People’s Party (EPP), the largest and oldest grouping in the European parliament.
But their tone shifted as this year’s elections drew near and took a dramatic turn after, branding EUDR a “bureaucratic monster” and calling for a delay in its application.
So it wasn’t exactly a surprise when on October 2, the European Commission, led by EPP-member Ursula von der Leyen, proposed to delay the law’s application by a year, based on “feedback received from international partners about their state of preparations” and wanting to “give concerned parties additional time to prepare”.
That feedback isn’t universal though: some farmer organisations and businesses said they have already made investments for compliance and worried a delay would kill the momentum for change.
Still, what shocked everyone was what happened before the European Parliament’s vote on whether to support or oppose the delay.
The EPP proposed numerous amendments, including extending the delay to two years, exempting large traders from due diligence obligations, and a new tier - ‘no-risk’ - where companies sourcing products from these places would be exempt from key due diligence obligations.
This set off a furore, with environmentalists saying these amendments would gut the law. (I tried to access the proposed amendments, which were linked to in a briefing published by the parliament, but the URL is no longer working. If anyone has a working link, please share!)
Just ahead of the vote on November 14, however, the group dropped the most contentious of their proposed amendments, wrote ARC2020’s Natasha Foote. But the “no-risk” category remained and that amendment passed, after the EPP “secured a slim majority with right-wing and far-right groups”, wrote Louise Guillot of Politico.
Further complicating the matters were complaints that voting machines weren’t working, calling the legitimacy of the vote into question. But the Parliament’s president didn’t approve a re-vote, according to both ARC2020 and Politico.
The vote has important implications “on the credibility of the European Green Deal for the public opinion” both domestically and abroad, said Andrea Carta, Senior Legal Strategist for the Greenpeace European Unit. “What kind of reliability does the EU have if it backtracks on its decisions and commitments?”
As with all EU legislative matters, the three key EU institutions, the Commission, the Council, and the Parliament, typically have to come to an agreement for a law to pass. But a week after the parliamentary vote, the Council was “almost unanimous” in rejecting the new amendments, sources told Louise Guillot.
This meant the Council, the Parliament and the Commission had to enter into interinstitutional talks to try and find a compromise. This week, they did, agreeing to a 12-month delay while keeping the text intact, the Council said in a statement.
Just in time too, given that the current deadline of December 30, 2024, would hold if they didn’t reach a deal.
A slippery slope?
Still, it is a bittersweet moment for environmentalists, because while the ‘no-risk’ category didn’t go through, the delay is still bad news.
According to Earthsight, the delay could result in the destruction of 2,300 sq km of forest and an extra 49 megatonnes of greenhouse gas emissions, equivalent to annual emissions from 18 million cars.
The delay “undermines the integrity of the legislative process and it does not look good internationally since the European Union should be a leader on deforestation issues,” Riccardo Gambini, EU Bioenergy and Forest Policy Officer of BirdLife Europe & Central Asia, told me
The EU has been trying to address this problem for decades and “when they finally put something robust for operators and member states to comply with, they revise it when it's not even implemented yet,” he said.
“The most important: the delay will drive more deforestation and more forest degradation without increased traceability and accountability and this will have impacts on the climate and declining carbon sinks as well as exacerbate the biodiversity crisis,” Riccardo added.
That’s not all. The environmental impact is also linked to the the operational and environmental risks of producers and traders, because a delay could aggravate the state of forests and undermine their businesses, he said.
He also pointed to the risk of zoonotic diseases, which deforestation can help spread, and an increase in forest fires, pests, and invasive species.
Or more breathing space?
But Elizabeth Teague from Root Capital, who I spoke earlier this year, said they are “encouraged” by the postponement, because they’re seeing how the burden of compliance has increasingly been passed to farmers and farmer businesses.
She was speaking from their experience working within the coffee and cocoa supply chains which she says have challenges and opportunities distinct from, say, palm oil.
“Downstream value chain actors are generally asking farmer businesses to absorb the cost of mapping their entire sourcing base and preparing data for the EU authorities. Yet this is a new cost for farmer businesses, who were also largely excluded from regulation design and implementation decisions and so may have only heard about the regulations a few months ago,” she said in an e-mail.
The delay will give farmer businesses more time to learn about and comply with the requirements, and also identify best practices that will ensure compliance without the costs and risks being pushed on to the most vulnerable, she said.
“Our greatest fear (shared by many working with smallholders) is that the regulation would unfairly exclude small farmers simply because they cannot prove their compliance, and because companies perceive the costs of helping them demonstrate compliance as too high.”
“In the rush to implement by the end of 2024, there were several reports of companies pulling back from smallholder supply chains. So we see the delay as a practical necessity, if we want to achieve zero-deforestation supply chains without leaving smallholders behind.”
Why the EU needs this law
EU is the second largest contributor to deforestation through its imports (16%) after China (24%), according to a 2021 WWF report.
This is higher than India (9%), U.S. (7%), and Japan (5%). The report also found the largest EU economies – Germany, Italy, Spain, the UK, the Netherlands, France, Belgium and Poland – were responsible for 80% of this deforestation.
Research published by Trase/Global Canopy earlier this year puts the EU’s indirect deforestation figure at 15%, which still make it the second highest in the world.
"Between 2019 and 20211, the EU was exposed to 190,500 hectares (ha) of deforestation on average every year from its direct imports – an area more than ten times the size of Brussels,” the report said.
Palm oil and soya account for more than two-thirds of the deforestation linked to EU consumption, said a 2023 paper from the European Parliamentary Research Service.
The Loki-nisation of EPP
In Norse mythology, Loki is the creator of chaos, and that was what I thought of when I started reading about the role EPP played in this whole saga. They shifted their alliance from the centre to the right - even flirting with the far-right - and created pandemonium in the process.
The “no-risk” category in particular alarmed many people, and even though that amendment was ultimately scrapped, I want to dwell on it a bit more because it is mind boggling.
The way it was designed meant there could have been as many as 86 countries in that group, Greenpeace’s Andrea told me, citing an estimate by French NGO Canopee.
“Hence, a large part of the planet would have become like an “offshore” area for the purpose of the EUDR,” he said.
“Commodities and products from these countries would have been entirely taken out of the scope of the regulation and placed under a regime whereby information access and reporting duties for companies, as well as enforcement duties for competent authorities, would have been minimal.”
“This would have opened the door to all sorts of laundering practices and fraud: e.g. wood from a “high risk” country being mixed with wood from a “no-risk” country, for instance in a piece of furniture, and sold as “no-risk”.”
Declaring your products as coming from “no-risk” countries also would have meant the risk of being inspected every year is miniscule and there is no obligation to submit a due diligence report. All this incentivises businesses to choose this route.
“Removing the obligation to file a “due diligence statement” would have had the consequence of making potentially immense trade flows fall out of the system. At that point it would have been really difficult for anyone to understand what's happening on the market: competent authorities wouldn’t have known who to inspect or have visibility of the possibility of fraud. NGOs would have found it extremely difficult to detect fraud and file complaints,” Andrea added.
The worst part, he said, was that this category “does not address any real need”.
And yet, there were reports that during the three-way negotiations, known as a trilogue, the EPP was unwilling to give up on the amendments they had pushed through with the far-right’s help.
They also pushed for the amendments and the delay just days after the release of a new poll which showed that 84% of nearly 15,000 respondents across seven European countries want a strong law to combat deforestation and 73% believe it should be a key priority for the EU.
So what gives? What caused the EPP to disregard public opinion and very real environmental concerns? Only to back down later? To score points with Big Ag who seem to dislike any reforms that would impinge on their ability to expand industrial agriculture?
Riccardo thinks they were playing with their power given they can now shift majorities on a case-by-case basis.
Andrea, meanwhile, found their position “inexplicable if you look at it from the perspective of a pro business party”.
“Bear in mind that the words of the day are competitiveness, innovation, legal certainty, and favourable environment for business. What guarantees can the EU offer to businesses when the regulatory landscape changes from one day to the other? We must not forget that that there are companies that actually made investments and were ready to run with the EUDR in January 2025, and now they run the risk of being undercut by laggards.”
Thin’s Pickings
Inside the Plastic Industry’s Battle to Win Over Hearts and Minds - The New York Times
Hiroko Tabuchi wrote that leaked documents show “how some of the world’s largest petrochemical and plastics companies have been waging a campaign to push back against a “tide of anti-plastic sentiment””, including by using paid influencers on TikTok and an infomercial hosted by Dennis Quaid.The world’s hunger watchdog warned of catastrophe in Sudan. Famine struck anyway. - Reuters
A heartbreaking situation rendered brilliantly and effectively, including to explain complex and technical processes.
Sadly, the story is also a reminder that hunger in this day and age is a political failure and a political choice, rather than a lack of food.Tales of Resistance: An exhibition of Artwork by The Kite Tales
This is more of an event than an article. We’re having another Kite Tales exhibition, this time in Chiang Mai! So if you find yourself in Thailand’s northern capital on December 13, come join us at Greenhouse Community Space from 6pm onwards. More details here.
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