Stumped! EU industries ‘gravely concerned’ over deforestation rules

Twenty-eight organisations representing European primary producers and various industries have urged a delay of the entry into the application of the European Union Deforestation Regulation (EUDR). The European Commission does not intend to postpone implementation.

On 25 September, the concerned organisations issued a statement supporting the Commission’s goal of eradicating deforestation and forest degradation but raised questions over the regulation’s feasibility and lack of clarity.

“With less than 100 days before the EUDR takes effect, we are still grappling with severe legal and market uncertainties,” they declared, explaining that adjusting practices in compliance with the regulation cannot be achieved at the last minute.

The statement highlighted repeated warnings over the past year asking “for clarity for a workable, harmonised implementation of the regulation”. Concerns have gone unanswered, signatories remarked, especially on the need for a functional EU Information System and proper benchmarking for low-risk countries.

“The current situation clearly shows that implementing the EUDR by the end of 2024 is simply unfeasible and would result in many small businesses being wiped out of the market and job losses in rural areas,” the statement reads.

The signatory organisations foresee serious market disruptions, which would severely harm European primary producers and downstream industries, threatening supply chain security, reducing market access to vital EU food, feed, and forest products, increasing inflationary pressures, and threatening the livelihood of many.

Commission not backing down

Despite mounting pressure and backlash from industries, trading partners, MEPs as well as governments, the Commission insisted it remains focused on having the EUDR be implemented as early as 30 December 2024.

“The Commission is still working very hard on preparing the ground for the implementation of this regulation. In particular, we’re discussing a great deal with our partners in third countries,” spokesperson Adalbert Jahnz told reporters in Brussels.

“Obviously, the Commission has not made any proposals to change the Deforestation Regulation at this stage,” Jahnz added, not confirming whether a postponement has been considered or not.

European People’s Party (EPP) Agriculture Chief Herbert Dorfmann previously told Euractiv that Commission President Ursula von der Leyen would propose a way out of the enforcement deadlock of the EUDR.

Before that, the EPP issued a statement labelling the deforestation law a “bureaucratic monster”, urging for its immediate delay, citing concerns over “the jungle of implementing rules” that will apply to several production sectors.

The implementation of the new regulation will see products linked to deforestation overseas being banned from entering the EU market. Targeted products include coffee, cocoa, beef, soy and palm oil.

Astronomical costs

Exporting countries such as Brazil, Malaysia and Indonesia have warned that the regulation could act as a trade barrier, affecting small farmers and disrupting supply chains.

In an overview of the potential EUDR economic impact on the EU feed chain and livestock sector regarding soybean meal supplies, the European Feed Manufacturers’ Federation (FEFAC) forecasted a €2.25 billion total cost for soy supplies for the EU market in Q1/Q4 2025.

According to FEFAC, atypical low market offers for Q1 2025 deliveries could lead to supply disruptions, with the EU’s 2025 demand for 30 million tons of soybean meal unlikely to be met with EUDR-compliant products.

Legal uncertainties surrounding the regulation have increased costs for suppliers. Prices have potentially been raised by 5-10 per cent, and such a thing could result in an extra cost of €750 million to €1.5 billion for soybean meal.

The €2.25 billion extra cost forecasted by FEFAC takes into account the rising of alternative protein sources, including rapeseed meal, sunflower meal, and amino acids, with a serious economic impact on the competitiveness of the EU’s livestock sector.

The risk of supply chain disruption varies by region: low-medium risk for North America, medium risk for Argentina, Brazil, and Paraguay, medium-high risk for Ukraine, Serbia, and the EU, and high risk for West Africa, India, and China.

[Edited By Brian Maguire | Euractiv's Advocacy Lab ]