European Commission Ruffles U.S. Feathers With New Regulations

The European Commission is proposing that the new EU Deforestation Regulation be delayed 12 months before implementation to allow international parties additional time to prepare. If approved by the European Parliament and the Council, it would make the law applicable on December 30, 2025 for large companies, June 30, 2026 for “micro and small enterprises.”

The Commission said that it recognized that three months ahead of the intended implementation date, several global partners had repeatedly expressed concerns about their state of preparedness, and the state of preparations amongst stakeholders in Europe is also uneven. 

“The extension proposal in no way puts into question the objectives or the substance of the law, as agreed by the EU co-legislators,” according to the Commission.

The Commission also published the principles of the methodology it will apply to the EUDR benchmarking exercise, serving to classify countries as low, standard, or high risk, and noted that a large majority of countries worldwide will be classified as low risk, allowing more focus where deforestation challenges are more acute. 

The EU Deforestation Regulation aims to ensure that a set of key goods placed on the EU market will no longer contribute to deforestation and forest degradation in the EU and elsewhere in the world, and claims that deforestation and forest degradation are important drivers of climate change and biodiversity loss.

The implementation delay comes not longer after 73 members of the U.S. House of Representatives wrote a letter to President Joe Biden to appeal the European Union’s deforestation regulations, which they claim will hurt the entire forestry supply chain in the U.S. The legislators called on Biden to request a two-year delay; that that many U.S. producers still lack clarity on specific data requirements, data input systems, and underlying definitions “that will affect the entire U.S. forestry supply line. Without more time for implementation, billions of dollars of trade are at stake. Forest product exports from the U.S. to the EU are valued at over $3.5 billion USD. Without legal certainty that U.S. producers can place products on the EU market according to EUDR compliance requirements, significant trade disruptions will results. The inability to ship to the EU will have cascading negative economic impacts, including devaluing U.S timberlands and U.S. manufacturing job losses. The United States is a global leader in modern sustainable forest management, and we are deeply concerned that well-intentioned regulations from Europe will disincentivize the huge investments U.S. forest owners have made in the long-term health and sustainability of our forest resources.”

The EU has said one of the driving factors behind deforestation is the production of coffee, soy, palm, oil, cocoa, cattle, wood, and rubber. Under the new rules, products made from these commodities must not have come from recently cleared forest lands and must not have contributed to forest degradation. 

A representative of a Southeastern U.S. veneer manufacturer and timberlands owner says one major aspect of the EUDR is that it prohibits the conversion of forestland to agricultural land and places restrictions on certain types of forest-to-forest conversions. Additionally, the regulations are unclear regarding timber from naturally regenerated forests.

“To comply with the EUDR, companies and landowners must conduct rigorous due diligence to trace the origin of goods and prove compliance with strict deforestation-free standards. While the intent is to promote sustainable supply chains, the regulations could have unintended consequences. Although these regulations are European, they directly impact pulp, paper, and forest products industries, as well as landowners. In order to access European markets, Alabama companies will be forced to comply with these stringent regulations, effectively transferring control over land management decisions to the EU. This compliance requirement places an undue burden on landowners, who may be forced to adhere to EU standards or lose the ability to sell their timber and other products.”