EUDR: A bumpy road towards implementationThe European Deforestation-free products Regulation is supposed to come into force by end of this year (except for SMEs which will be directly subject to it from end 2025) and the European Commission is currently working intensively on its practical implementation. But…
With the other European Woodworking Industries associations, FEP fully supports the scope and the objectives of the EUDR and strongly opposes all forms of deforestation and forest degradation. At the same time, FEP regrets that the EUDR has become a huge administrative and regulatory monster, and that implementing tools are far from ready, reflecting that the EC is lagging behind its schedule.
Potential defaults have been frequently underlined by stakeholders, including FEP, since the beginning of the legislative procedure (geolocalisation of plots, impacts on small producers, data confidentiality, administrative burden, etc.). Unfortunately, some issues are still observed while the deadline for implementation is approaching.
The Information System
A significant example is the Information System (IS), intended to be the main tool supporting the EUDR implementation by all the actors, which is still at an early stage of development and needs significant improvements, in particular when it comes to the automatic, reliable and safe collection, registration, and protection of commercially sensitive information.
At the end of last year, FEP, as a member of the EU “Expert Group/Multi-Stakeholder Platform on Protecting and Restoring the World’s Forests with a focus on deforestation”, had the possibility to propose its interested Members to participate to the pilot testing of this IS. Among 100 companies selected from all sectors concerned (EUDR is not only covering wood and wood products but also cocoa, coffee, soy, palm oil, rubber and cattle), not less than 3 FEP Members were retained and took part to the testing.
The feedback from all participants, whatever their sector, to the testing, held in December 2023-February 2024, is clear: the IS in present state is not enough user-friendly and intuitive. For instance, the geolocation coordinates need to be provided as part of Due Diligence Statements (DDS) that must be submitted to the IS which, regretfully, does not allow so far for any transfer of information between the 2 systems but rather opts for almost completely manual data entry, bringing not only higher costs and administrative burden, but also an increased risk of errors. Furthermore, there are growing concerns of data protection and data security as it remains unclear who oversees the data management.
These are practicalities that can be solved or improved but this will take time…and pleads for the proposal FEP has made to the EC to have a second round of IS testing.
The risk-based approach
Moreover, the European Woodworking Industries, including FEP, are greatly concerned that the EC could intend to delay the application of the much-needed risk-based approach – practically implemented via a risk benchmarking of producing countries (low, standard, and high risk) – which is essential for enabling compliance with the EUDR by market actors and the Competent Authorities (CA) of the EU Member States, as well as for incentivising good practices in producing countries (EU Member States or third countries).
Instead, all countries will now apparently be designated as “standard risk” in order to “give them more time to adapt” to the new Regulation. It is crucial to understand that the benchmarking of countries is a central part of the EUDR and its implementation, and any delays related to this classification will only result in additional costs and administrative burden for market actors, without any real advantages either for the producing countries or for the CAs.
Indeed, per the EUDR, whether market actors source their commodities from standard risk countries or from high risk countries, they are facing the same Due Diligence obligations. Simply put, the benefit implied by the seemingly planned delay of the country risk benchmarking does not exist because no simplified procedure for exports or imports is actually foreseen for standard risk countries, compared to high risk countries.
The only difference between the two tiers of risk is the implication that it has on the control and verification obligations of CAs: CAs must control 9% of all the operators placing or making available on the market or exporting relevant commodities and products originating from high risk countries, compared to 3% in the case of relevant commodities and products originating from standard risks countries.
However, it is essential to identify low risk countries as the implications are significant to all actors: when sourcing from low risk countries, market actors do actually benefit from the possibility of simplified Due Diligence, while CAs can reduce the number of controls to 1%.
There are also concerns about the credibility of a growing number of emerging private parties offering to facilitate Due Diligence submissions, and which are developing concepts on the current lack of information.
The transition period
Additionally, in the case of wood, aspects related to the transition period from the currently applicable EU Timber Regulation (EUTR) to the EUDR still need to be clarified. The goal is to ensure that wood which has been legally sourced until 30 December 2024 in full compliance with the EUTR can be sold on the EU market. It is crucial that the EU IS takes this into account and does not require retrospective submission of data of downstream producers when they place goods on the markets which originates of raw material harvested before 30 December 2024.
These difficulties associated with the implementation of the EUDR are reflected by the challenges faced by the EC when seeking to deliver on its own commitments under the Regulation. The EC is clearly lagging behind its schedule.
FEP requests
In the light of all the above, FEP, with all sectors concerned by EUDR, is continuously informing the EC of the weaknesses of the IS. FEP, with other European Woodworking Industries associations, is also urging the EU institutions to delay the entry into application of the EUDR for the operators and traders, to amend the EUDR in order to eliminate unnecessary bureaucratic hurdles and to provide actors with sufficient time to adapt for full and adequate compliance.
Finally, FEP is in contact with the certification scheme FSC and discusses with them the alignment of their relevant modules to the EUDR requirements. FEP is continuously informing its Members on the information delivered by FSC (webinars, key takeaways, links…) as well as from PEFC which started a bit later its procedure.
