- EUDR implementation is likely to be delayed for another 12 months;
- The Commission has highlighted capacity problems, but internal objections are a major factor;
- Groups across the EU have welcomed the decision, as have exporting groups
For folks in the palm trade, this feels like a case of de ja vu. It is almost exactly 12 months ago that the EUDR was initially delayed for a period of one year. Back then, the Commission stated:
“The Commission considers that a 12-month additional time to phase in the system is a balanced solution to support operators around the world in securing a smooth implementation from the start. With this step, the Commission aims to provide certainty about the way forward.”
So what has changed? Not a lot.
If you’ll remember, the European People’s Party was originally pushing for a two-year delay – and it turns out that they’ve got what they wanted.
The document issued by Environment Commissioner Jessika Rosewall points the blame at the IT system and the large volumes of data that will be required to be processed for compliance. It states:
“One issue is related to the way economic operators can choose to interact with the IT system to facilitate their operations. Another is related to the obligations placed on downstream operators by the EUDR, despite efforts over the last months to provide simplification to stakeholders. Further factors relate to the high volume of small packages that are imported into the EU, or the impact on the length of replies to operators of various internal checks by the Commission or the Competent Authorities of the Member States related to submitted data.”
To many industry observers, this was always going to be a substantial problem, whether it was in palm oil, pulp or food. The goal of being able to trace an ingredient back to its point of harvest is ideal, but not necessarily practicable.
In the view of this commentator, seeking perfect traceability has got in the way of reducing deforestation. It also chose to ignore the workable systems that are already in place for any number of commodities. They’re not perfect – but the perfect shouldn’t be the enemy of the good.
This practical problem, however, created a political storm. Once COPA-COGECA – Europe’s biggest farm lobby – was lining up for another delay with numerous member states, it spelt trouble. Add to this car manufacturers concerned about leather goods. And that’s a recipe for regulatory disaster.
So, what happens next?
The path forward isn’t yet clear. The Commission will need to assess whether it wants to make wholesale revisions to the Delegated Acts, or if it simply wants to increase capacity and budgets for the implementation itself. One option that was floated was the non-pursuit of penalties in the first two years of the regulation. But this would hardly inspire businesses to prepare, nor would it convince member states to get their IT systems ready.
The question that everyone should really be asking is this: which solution is going to satisfy the EU’s internal constituents – member states, political parties and business lobbies?
Here’s a roundup of European and other reactions in the past 24 hours:
“The EU Commission’s proposal is absolutely right. I fully support the goals of the EUDR – global forest protection. But the EUDR is associated with unnecessary bureaucracy for countries like Germany. There is no deforestation in our country, but our economy is still massively burdened by the EUDR. I have repeatedly lobbied the EU Commission for the introduction of a zero-risk variant in the EUDR. The Commission hesitated for a long time, but now time is running out. This could only be cured with the postponement.” – German Federal Minister of Agriculture, Food and Community, Alois Rainer
“Our efforts regarding the EUDR are successful! In a letter, Jessika Roswall announces postponing the [EUDR] by one year. Starting 01/01, it would cause unsolvable problems for forest owners, farmers and SMEs. Simplifications must now follow as a matter of urgency.” – Peter Liese, EPP
“Once again, the Commission is postponing the EUDR. However, a bureaucratic monster cannot be tamed by postponement. Fundamental changes to the regulation are needed. The introduction of a zero-risk category must protect German forest farmers and businesses from bureaucracy.” – Markus Ferber, EPP
“As a sector committed to the continuous improvement of the raw materials it transforms in general and to their non-deforested origin, we celebrate this extension as an opportunity to seriously address the reform and simplification of regulations. Thus, this regulation could go from being a risk to the sustainable supply of raw materials and the competitiveness of the food sectors we serve, to being an opportunity to value the efforts of the chain in a way that is achievable and real.” — Director General of CESFAC (Spain’s peak body for animal feed), Jorge de Saja
“[We] welcome the European Commission’s decision to propose to the European Parliament the new postponement of the application of the EU Regulation on Deforestation (EUDR) [and] are willing to work now on the necessary simplifications, reducing administrative burdens and concentrating due diligence on the first operators.” — Confagricoltura and FederlegnoArredo, Italian agriculture and wood/furniture associations
“For the National Coffee Council, the postponement reinforces the need for permanent dialogue between producing and consuming countries, in order to build a fair and feasible regulation.” – Brazil’s National Coffee Council
“Delaying implementation is the right decision … The Commission’s acknowledgment that the IT systems are not ready is important, but the systems are not the root of the problem. Rather, they are a symptom of an overburdensome regulation. We need broader simplification of the regulation itself, especially for countries that pose little to no risk for deforestation, to ensure the law works as intended.”— North American Forest Owners President & CEO Dave Tenny.
“We were really in the hot phase now … A delay is really, really helpful.” — Luis Batista, sales manager at Germany’s Barth & Co., which imports parquet flooring.
“It is probably no coincidence that this move comes right as the Commission pursues an unprecedented deregulation agenda, throwing the EUDR under the bus. This is unacceptable and a massive embarrassment for President Von der Leyen and her Commission. If this technical issue is real, this shows not only incompetence, but also a clear lack of political will to invest sufficiently in a timely implementation of the EUDR,” — Anke Schulmeister-Oldenhove, Forest Policy Manager at the WWF European Policy Office.