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EUDR - Myths vs. Reality

Debunking myths around the EU Deforestation Regulation

  • “A farmer cannot cut down and sell one of their own trees”
    Reality: Farms are generally agricultural land and hence out of the scope of EUDR

    The law generally imposes no restrictions on farmers felling trees on their property. In cases where part of the farm is a forest (>0,5 ha and meeting all other conditions), then the harvesting of trees is also allowed under EUDR, provided that the forest is not degraded and that it is allowed to regrow. There are no legal obligations on farmers unless they place products in the scope of the EUDR on the market directly. 

    The EUDR aims to foster, not hamper, sustainable and legal forestry management practices.

  • “Every single grain of coffee must be tracked to its origin"
    Reality: Companies don't always need to assign a specific product to a specific sourcing area

    Supply chains are complex and involve lots of different steps. In the process, commodities from different plots are sometimes put together. The law therefore allows for aggregated traceability, meaning that companies add up and report on all the sourcing areas, all relevant plots of land, even if they cannot assign areas to specific products. In those cases, they can assign all sourcing areas to all their final products. Companies can also “declare in excess” if and when only a part of the whole is placed on the market (e.g. when placing on the market part of the cargo of a bulk carrier with grain). Products should not, however, be mixed with uncompliant products or products of unknown origin. 

  • A mountain of paperwork
    “EUDR means a mountain of paperwork"
    Reality: Due Diligence can be done online. Information can be submitted once and then reused.

    Due diligence statements are submitted electronically in the EU digital database (the Information System). These statements will be checked in the registry and by Member States' authorities. Basically, EUDR requires companies to make sure that they have clarity on where they are sourcing their commodities from, in order to prevent deforestation and forest degradation. Submitting due diligence statements with geolocation is the most straightforward and simple manner to do so. 

    The Information System, which the Commission will make available before the date of application of EUDR, is designed to significantly reduce administrative burdens and increase efficiency. Furthermore, an interface in the system (Application Programing Interface) will allow operators and Member States’ authorities to link their existing systems directly to the central registry, as an alternative to using its standard web version. This functionality eliminates the need for manual upload of information. In addition, companies can rely on information that has previously been submitted to the Information System, without the need to provide the same information repeatedly. 

  • A barrier
    "EUDR is discriminatory and creates barriers to trade"
    Reality: All countries and products are treated equally and following WTO rules.

    The EUDR is based on the principle of non-discrimination. It applies equally to products produced inside and outside of the EU and to anyone who wants to sell products on the EU market. 

    The law is designed to be fully compatible with World Trade Organisation (WTO) rules in a way that does not constitute arbitrary or unjustifiable discrimination for third-country producers, or a disguised barrier to trade. 

    The EUDR is an autonomous measure taken by the EU to protect the environment and to comply with its international commitments, including trade agreements and WTO requirements. It does not imply a trade ban: no country or commodity will be banned.

    The EU – as the world’s largest donor of international assistance – has been engaging with partners and will continue to do so to address concerns and support partners so that trade can continue without deforestation.

  • Lines of planted trees
    “Agroforestry and sustainable farming will be non-compliant”
    Reality: respectful agroforestry and farming are promoted and do not conflict with the EUDR

    Flexibility will be ensured on agricultural use, so that environmentally respectful agroforestry and farming practices are promoted and not regarded as conflicting with the EUDR.  

    FAO definitions do not consider agroforestry systems as forests, but as ‘agricultural use’ and for the purpose of the Regulation, land under ‘agricultural use’ is not considered a ‘forest’.  

    The same is true of agricultural plantations, e.g. oil palm plantations fall under ‘agricultural use’ and are not considered as a ‘forest’ under the EUDR.  

    Certain farming practices, such as environmentally friendly agricultural use, e.g. establishing protective groups of trees or grazing area also do not fall under the definition of ‘forest’ of the EUDR.

  • Interfering with sovereignty
    “the EU is interfering in sovereignty by including legal deforestation”
    Reality: It is not enough to tackle only illegal deforestation.

    Much of the agricultural expansion that causes illegal deforestation is legal according to the laws of the countries of origin. The Impact Assessment by the Commission found that tackling only illegal deforestation could encourage a race to the bottom in countries highly dependent on agricultural exports that may be tempted to lower their environmental protection to facilitate their access to the EU market.

    Because of our global supply chains, a policy on one continent can protect ecosystems on another. Through EUDR, the EU takes its responsibility as one of the main consumer markets. The EU has the right to set standards for products sold in its territory, especially as these are necessary to achieve global commitments in terms of climate and biodiversity. Partner countries have been and continue to be regularly involved in discussions on the implementation of the EUDR, for example, via the Multi-Stakeholder Platform on Protecting and Restoring the World’s Forests.

  • “The EUDR will lead to supply bottlenecks and price increases”
    Reality: The benefits could outweigh the costs for businesses

    The requirements of the EUDR are aligned with the best practices already existing on the market. To facilitate the adaptation to EUDR, enterprises are benefitting from transition periods, with longer periods specifically for small and micro-enterprises (SMEs). 

    Traceability will increase transparency in the supply chain and could contribute to reducing the number of intermediaries. Geolocation information can be obtained through widely available and free technology and only needs to be established once (one-off cost). Companies/operators sourcing from smallholders as well as cooperatives and governments can provide support to smallholders. 

    The Impact Assessment underpinning the proposal estimated that the costs of compliance for companies are significantly lower than the expected benefits in terms of monetised greenhouse gas emissions reductions and that products which meet the requirements of the EUDR will have a competitive advantage in meeting the growing demand for sustainably sourced products worldwide

  • A computer without a clue
    "The Information System is not ready"
    Reality: Roll out is being completed according to plan

    The development of the digital database (Information System) is being finalised according to the plan. A number of new measures have been put in place since the pilot testing with 100 companies conducted in January, notably:

    • Since May, connection to the Information System via an Application Programming Interface (API) has been open to the public.This enables private and public stakeholders to submit Due Diligence Statements in an automated manner, reducing the need for manual input.
    • Since August, all interested companies are able to test theirgeolocation files with the Commission IT service to determine whether these files are compatible with the System
    • In-person training sessions for Member States’ competent authorities are planned in Brussels. Following this session, competent authorities will be able to organise trainings for their national economic operators
    • Video tutorials on how to use the Information System are available
    • Information on the Commission website has been updated and reorganised to facilitate access by the public.
  • EU money
    "There is no money to roll out EUDR"
    Reality: Financial and other resources are in place to implement and supervise compliance

    EU Member States are setting up their national legislative frameworks to implement and enforce the Regulation. This will ensure that national competent authorities have adequate powers, functional independence and resources to fulfil their obligations.

    The EU has several programmes to facilitate the transition for smallholders, notably a Team Europe Initiative (ca. €80 million), which includes the SAFE Programme (ca. €60 million). They provide financial and technical support to enhance deforestation-free supply chains in partner countries, paying specific attention to smallholders’ needs. The EU is also funding capacity building and training of EU stakeholders via the LIFE Programme.

    The Commission is committed to helping partners reduce deforestation and forest degradation, by supporting them to strengthen forest governance, develop legislation and foster capacities. It has pledged €1 billion at COP26 to facilitate the protection, restoration and sustainable management of forests in partner countries. The Forest Partnerships, a new development cooperation tool, will tackle deforestation as one of its objectives. Acknowledging that one size does not fit all, Forest Partnerships will be tailored to fit the specific needs of partner countries.

  • SME killer
    “The EUDR is an SME killer”
    Reality: Several provisions to cater for the needs of SMEs

    All SME operators are exempted from annual reporting obligations and enjoy lighter requirements in terms of risk mitigation. In addition, SME downstream operators do not need to exercise due diligence and do not need to file due diligence statements for (parts of) products that have been subject to due diligence further up the supply chain. 

    It is important to note that the Regulation gives 6 additional months to micro- and small undertakings to prepare for its application, in comparison to all other operators and traders.

    Contrary to non-SME traders, SME traders do not need to check or submit due diligence statements for products that have been subject to due diligence before that up in the supply chain.

    It is to be noted that SME operators in the wood sector were already subject to the EU Timber Regulation and hence have been dealing with due diligence obligations for more than a decade under EU law.

  • “EUDR will harm smallholders in developing countries"
    Reality: No legal obligations for smallholders outside the EU, and several benefits

    The main legal obligations under the EUDR apply to the operator placing products on the EU market, for instance the importer, and not to farmers that do not directly sell their products in the EU.

    Smallholders will need to provide to operators the geolocation data about the land, where their products come from. This data can be obtained through widespread and free mobile technology and only needs to be established once (one-off cost).

    Smallholders’ organisations have expressed the view that the EUDR could give them a stronger and more independent position in the value chain due to the geolocation data that they own. In turn, this could provide for fairer prices for their products, potentially leading to higher incomes and provide new business opportunities, especially if accompanied by targeted support measures.

    The Commission is providing support to help smallholders prepare. The EU has adopted a Team Europe Initiative (€80 million) focusing on enhancing deforestation-free supply chains and addressing smallholders’ needs, along with other funding programmes such as the SAFE Programme (€60 million). These provide financial and technical support to partner countries. 

    See also the factsheet on opportunities for smallholders.

  • Risk classification
    “The risk classification system is discriminatory”
    Reality: Objective and transparent, it applies to EU and non-EU countries alike

    Through the risk classification system (benchmarking) the Commission will assign a risk level to countries or parts thereof (high, standard and low risk). The assessment will be based on an objective and transparent analysis of quantitative and qualitative criteria, taking into account the latest scientific evidence and internationally recognised sources.

    The benchmarking will apply equally to countries inside and outside the EU in a non-discriminatory manner. Low risk classification does not entail full derogation from basic requirements. Operators that source commodities entirely from areas classified as low risk will also be subject to due diligence obligations, albeit simplified, and will have to provide the geolocation, i.e. ensure full traceability.

    High risk classification means that shipments from these countries will be subject to more comprehensive checks and inspections, but there won’t be a ban on selling products from that country or region on the EU market. Furthermore, high risk classification will be accompanied by a dedicated dialogue with the Commission to jointly address the root causes of deforestation and forest degradation, with a view to reduce the level of risk.

  • "EUDR will cause upheaval in global supply chains"
    Reality: vast majority of current agricultural production will be considered deforestation-free

    With the 31 December 2020 cut-off date, the vast majority of current agricultural production will be considered deforestation-free under the Regulation.  

    The European Commission, in collaboration with EU Member States, is continuously working on putting all necessary measures in place for smooth and timely implementation.

    This includes setting up the IT systems, a Guidance document and Frequently Asked Questions documents (FAQs) as well as guidance for operators and enforcement authorities that clarify some aspects of the Regulation and address the most relevant questions raised by industry organisations.

    The Information System is designed to minimise the administrative effort, using a central registry allowing efficient data entry and verifications. It also allows operators’ and Member States’ systems to link to it (through an Application Programming Interface), further facilitating automatic sharing of information.

    In addition, the Commission is maintaining an open and constructive dialogue with stakeholders to address concerns and ensure the successful implementation of the EUDR. The inclusion of smallholders, both within and outside the EU, is a priority. The EU is also supporting smallholders in partner countries through the €80 millionTeam Europe Initiative on deforestation.

  • “The benchmarking is late, which will affect trade”
    Reality: list of countries will be published before entry into application

    The process to develop the methodology of the benchmarking is well advanced for the list of countries to be published in time.