EU moves to delay rules against deforestation

Unlock Editor’s Digest for free

FT editor Roula Khalaf selects her favorite stories in this weekly newsletter.

Brussels plans to delay a controversial anti-deforestation law by a year in response to growing concerns from trading partners, the European Commission said.

“Considering the feedback received from international partners on their state of preparedness, the commission also proposes to give stakeholders additional time to prepare,” it said on Wednesday, publishing compliance guidance for exporters.

The proposal must be approved by the European parliament and member states before the law comes into force on December 30. It would be implemented 12 months later.

The law, which aims to prevent European consumers from contributing to deforestation, states that goods such as coffee, cocoa, rubber, timber and palm oil cannot enter the bloc if they are grown in deforested areas.

Last week, 27 European business associations representing farmers, magazine publishers and manufacturers called for its implementation to be delayed, echoing demands from several countries, including Germany. Other industry groups have warned of shortages and price increases for staples including coffee, soybeans, beef and rubber.

Manfred Weber, head of the European People’s Party, the EU’s biggest political party, which counts Commission President Ursula von der Leyen as a member, welcomed the move to delay what he called a “bureaucratic monster”.

Major commodity producers such as Brazil and India have attacked the laws as protectionist, while palm oil growers in Indonesia have said they may not be able to comply with the legislation because they are still waiting for government permission to share geolocation information.

Fediol, which represents the EU vegetable oil industry, has privately warned members that importers risk “not complying with the national legislation of the producing country to comply with the EU Deforestation Regulation”, according to an internal briefing seen by the Financial. Times.

“The alternative is for operators to stop sourcing from such countries, leading to significant supply shortages,” he added.

Indonesia is the EU’s largest supplier of palm oil, accounting for around 40% of the bloc’s imports, which is used in a wide range of food, cosmetic and pharmaceutical products. The Indonesian Palm Oil Association, a trade group representing producers, asked the government in September for permission to share some data for EUDR compliance, president Eddy Martono said.

“We set out to allow geolocation sharing specifically for planted or harvested areas, so it’s not the full map of the company’s geolocation permit,” he said.

Indonesia has strict laws that prohibit the sharing of data on agricultural land, such as the boundaries of specific concessions, citing national security and privacy concerns. The government has also refused to comply with a 2017 order by the country’s Supreme Court to release detailed maps and data on palm oil plantations.

The data cannot be shared by growers without government permission, according to the association.

Indonesia’s palm oil industry has been plagued by allegations of deforestation and other environmental damage. Green groups have long called for greater transparency to strengthen oversight of the sector.

Fediol managing director Nathalie Lecocq told the FT that the transport registration IT system was likely to have been overwhelmed by the amount of data that needed to be transmitted.

Many producing countries, including Thailand, Vietnam and Brazil, have already put measures in place that they hope will comply with the rules.

Johari Abdul Ghani, Malaysia’s plantations minister, told the FT that talks with Brussels had been “productive”.

In a separate statement last week, he said 73 percent of palm oil plantations on the surface were grown by large corporations, “many of which are already equipped with the knowledge and support to comply with regulations and export” to Europe .

The commission said it “agreed to step up discussions with Indonesia and Malaysia on data privacy issues with a view to resolving any possible remaining concerns”.

Additional reporting by Diana Mariska in Jakarta