EU deforestation traceability system to launch in Nov

Clarification: Paragraphs one, three and four have been changed to clarify the implementation deadlines for the EU deforestation regulation, after it was established that the expert's initial interpretation of the deadlines mischaracterized the situation. Argus published a clarification on 28 June 2024 with more details.

The European Commission is set to unveil an information system to help with the implementation of the EU deforestation regulation (EUDR) in November, but different implementation deadlines for larger and smaller firms may constitute trading barriers in the interim for certain wood categories, the senior policy officer at industry association Bioenergy Europe, Daniel Reinemann, told the Argus Biomass Conference.

The Due Diligence Statements (DDS) information system will provide a "due diligence statement number and [companies] link it" with the product they are producing and selling to trace the origin of products throughout the supply chain, as required by the EUDR, Reinemann said at last week's conference.

Mandatory due diligence under the EUDR for operators and traders selling and importing wood products — among other commodities — into the EU will apply from 30 December 2024 for operators of wood products covered by the EUTR (EU Timber Regulations), applying to all operators, including small and medium-sized enterprises (SMEs). However, EUDR expands the scope of wood products that are covered and SMEs producing these new products will have until the end of June 2025 to come into compliance with the new legislation. These products include among others wood charcoal, wood wool, wood flour, tools and handles, kitchen and tableware made of wood, and other wood products.

The different implementation start dates may result in challenges for trading between the two company sizes for the affected wood categories, Reinemann said. For instance, a small operator selling such products to a large company would have different levels of requirements to meet in the first half of 2025 when the small operator will not be obliged to meet EUDR requirements, he said.

Some operators that lack the logistical and cost capacity to meet the EUDR requirements may decide to exit the market, but "realistically, we do not know how significant that share is", Reinemann said.

The US Department of Agriculture (USDA) has previously commented on concerns over the implementation of this regulation, arguing that it could limit US wood product exports to Europe.

Despite the challenges surrounding implementation of the EUDR regulation, "the accountability [it will require operators to have] will give [the public] a lot more faith in the system", Reinemann said.

"The regulation will primarily impact forest owners as feedstocks are the first to be targeted," Bioenergy Europe policy director Irene di Padua said in an interview in February.

The EUDR will apply to imports of cattle, cocoa, coffee, oil palm, soya, rubber, wood and their derived products to the EU.

By Hannah Adler