As part of the European Union?s efforts to make Europe the first climate-neutral continent by 2050, the European Parliament and Council formally adopted the European Union (EU) Deforestation-free Regulation (EUDR) on June 29, 2023.
This new regulation, which replaces the EU Timber Regulation (EUTR) established in March 2013, will require all importers of timber or timber products in the EU to apply a due diligence system that follows a prescribed method with transparency and information along the supply chain.
What is the EUDR?
The EUDR affects seven specific commodities “cocoa, coffee, soy, palm oil, wood, rubber, and cattle” and their derivatives, as well as products made using these commodities (furniture, as an example, in the case of wood). The regulation will require any company importing these commodities to the EU to prove the products are deforestation-free.
Deforestation-free means the products come from plots of land where no deforestation or forest degradation, as defined in the EUDR, has occurred since December 31, 2020.
The EUDR covers a range of forest products, including sawn timber, wood-based materials, paper, and furniture. Click here to review the complete EUDR language, and scroll down to Annex I at the bottom to see all wood products covered.
How Did the EUDR Come About?
The European Commission’s Stepping up EU Action to Protect and Restore the World?s Forests, introduced in July 2019 as part of the EU Green Deal, outlined a plan to improve the health of existing forests and increase sustainable, biodiverse forest coverage worldwide.
Here’s a brief timeline of how the EUDR unfolded:
- May 2003: The European Union adopted the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, which focused on illegal logging and associated trade but it did not address deforestation. The two main components of the FLEGT Action Plan were the EUTR and Voluntary Partnership Agreements (VPA) between the EU and timber producing countries.
- 2014: New York Declaration on Forests publishes global timeline to slow and end forest lost during the UN Climate Summit 2014.
- November 2021: The European Commission adopted a proposal for a regulation on deforestation-free products.
- December 2022: The EU agreed on a Regulation for deforestation-free products to guarantee products EU citizens consume do not contribute to deforestation or forest degradation worldwide.
- June 29, 2023: The European Parliament and Council formally adopted the EUDR.
- December 30, 2024: The EUDR goes into effect.
- June 30, 2025: The EUDR becomes effective for micro and small exporters. Definitions for micro and small exporters have not been determined.
How Can Lumber Manufacturers Comply with the EUDR?
It’s recommended that exporters begin preparing for the EUDR requirements now.
The EUDR will apply to all wood harvested from June 29, 2023, and placed on the EU market after December 30, 2024. Any wood harvested after June 29, 2023, but delivered to the EU before December 30, 2024, must adhere to the EUTR.
After December 30, 2024, exporters will need to provide the following information and documentation to comply with the EUDR requirements. If the required information and evidence is missing, customs authorities will not release the wood for import into the EU.
- Product description, including the common name of the species and full scientific name
- Quantity, either by kilograms, volume or number of items, or supplementary unit under the Harmonized System code
- Country of production
- Geo-coordinates of all plots of land where the wood was harvested.
- Date or time range of harvest
- Conclusive and verifiable information that the wood was legally harvested in accordance with the country’s relevant legislation
- Conclusive and verifiable information that the wood is deforestation-free
Click here to download a one-page EUDR factsheet
Why is This a Concern?
Among the biggest concerns in the current EUDR language is the geolocation requirement and the definition of “plot of land” as “within a single real-estate property.”
The EUDR, as written now, requires exact geo-coordinates of all plots of land where the wood contained in the product was (possibly) harvested. Forests are defined as areas greater than 0.5 hectares that contain trees 5 meters or taller.
For plots of land 4 hectares or less, a single point is sufficient, provided the coordinates are at least one second of latitude and longitude (an area 32m x 32m); for plots of more than 4 hectares, a sufficient number of points is required to describe the perimeter of the plot. Coordinates consist of a latitude and a longitude value with a minimum of at least six decimal places. No definitive quality has been announced as to what constitutes “a sufficient number of points” for plots of more than 4 hectares.
- Understanding the cost breakdown and final product margins because of more complex stock keeping units (SKUs).
- Identifying products and raw materials with the highest environmental impact and building implementation plans and due diligence processes for supply chains must be adaptable to regulatory changes.
- Screening the supplier base and (re)developing a Supplier Code of Conduct will be required for the policies to consider the implications of the new regulation.
- Identifying key technologies (including satellite imagery) and partners to increase evidence-based traceability.
- Auditing the base of suppliers, including providing proof with satellite imagery when sourcing from several suppliers or scattered production sites.
What’s Being Done to Modify the EUDR Language?
The Southern Forest Products Association is closely monitoring the EUDR and its requirements to identify how Southern Pine lumber manufacturers can adjust their operations to comply with the new legislation.
In addition to sharing updates on any future changes to EUDR language, SFPA’s concerns are being discussed with like-minded members of the Industry Trade Advisory Center a public-private partnership to help shape trade policy.
SFPA’s involvement through the ITAC-8 Committee provides detailed policy and technical advice, information, and recommendations to the Secretary of Commerce and the U.S. Trade Representative regarding trade barriers, negotiation of trade agreements, and implementation of existing trade agreements affecting its sectors.
SFPA also collaborates with allied organizations as well as our in-market consultants to help keep abreast of the issue and stay ahead of any changes when the EUDR is set to take effect December 30, 2024.
On the hardwood side, AHEC has recommended redefining “plot of land” to “an area of land delineated for geolocation and traceability purposes that consists of a single integrated management unit or, in the context of smallholders and local communities, a single jurisdictional area or cooperative association, or in the context of Indigenous Peoples, a single tribal area or reservation.”
Because the EUDR affects a broad range of products, there has been considerable global apprehension to the EUDR.
Make sure to follow the SFPA blog at SFPA.org, on social media, and subscribe to our monthly Lumber Shorts e-newsletter by clicking here to stay up to date on developments with the EUDR that could impact your operations.