US urges EU to delay deforestation regulation: Update

Adds comment from an EU official in paragraph six

The US government has urged the European Commission to delay the implementation of the EU's deforestation regulation (EUDR), which is due to come into force from 30 December.

"We are deeply concerned with the remaining uncertainty and the short time frame to address the significant challenges for US producers to comply with the regulation," US authorities said in a 30 May letter seen by Argus that was signed by agriculture secretary Thomas Vilsack, commerce secretary Gina Raimondo and US trade representative Katherine Tai, and addressed to the commission's vice-president, Maros Sefcovic.

The US authorities have together with "several stakeholders" identified four "critical challenges" for US producers to understand and comply with the EUDR: no final version of the EUDR information system for producers to submit the mandatory due diligence documentation has been established yet; no implementation guidance has been provided — with the traceability system expected to launch in November; many EU member states have not designated a competent authority to enforce the regulation; and finally, the EU has an interim decision to classify all countries as standard risk, regardless of forestry practices.

Should these issues not be addressed before the EUDR starts being enforced, it "could have significant negative economic effects on both producers and consumers on both sides of the Atlantic", the letter said.

"We therefore urge the EU Commission to delay the implementation of this regulation and subsequent enforcement of penalties" until the challenges have been addressed, it added.

An EU official confirmed receipt of the US letter to Argus and said the commission would reply in due course.

A number of EU member states had also urged the EU to revise the EUDR in March, although the EU environment commissioner said at the time that the EU was ready for implementation and that they did "not see any issues".

The EUDR requires mandatory due diligence from operators and traders selling and importing cattle, cocoa, coffee, palm oil, soya, rubber and wood into the EU. Derivative products that contain, have been fed with or made using cattle, cocoa, coffee, oil palm, soya, rubber and wood — such as leather, chocolate and furniture as well as charcoal, printed paper products and certain palm oil derivatives — are also subject to the regulation.

Firms must ensure that products sold in the EU have not caused deforestation or forest degradation. The law sets penalties for non-compliance, with a maximum fine of at least 4pc of the total annual EU turnover of the non-compliant operator or trader.

The regulation requires geolocation data for proof of traceability, and does not accept the widely used mass-balance approach, which has often been cited by industries as one major challenge for implementation.

The EUDR will establish a system to assess the risk for individual countries, but the US Department of Agriculture has previously said that even if the US were classified as a low-risk country, compliance would still be costly and challenging, and at least $8bn/yr of US agricultural exports to the EU would be affected.

By Erisa Senerdem and Dafydd ab Iago