The EU proposal to reduce deforestation, what does it mean for the timber sector?

January 18, 2022

The European Commission has proposed a new regulation to reduce global deforestation and forest degradation driven by EU consumption of certain commodities. If enacted, the proposed regulation would repeal the EU Timber Regulation (EUTR), therefore, having relevant implications for this sector. In this article, BVRio outlines some of the features of this proposal.

The proposed law would prohibit regulated commodities (cattle, cocoa, coffee, palm oil, soy, and timber) and derived products from being placed on the EU market or exported from it unless proven to be free from deforestation and forest degradation and produced under applicable laws.

The list of timber products closely follows that for EUTR. It includes nearly all CN44 timber products with a few exclusions (such as charcoal, tools, tableware/kitchenware, and packing material used exclusively to carry another product); all CN47 pulp and CN48 paper products except for bamboo-based and recovered products; and categories of wooden furniture under 9403 together with wooden prefabricated buildings (940610). As in EUTR wood seating under 9401 is not included.

The proposed regulation would impose mandatory due diligence rules on operators, meaning persons or entities placing the commodities and products in question on the EU market or exporting them from it for commercial purposes. Due diligence requires (1) the collection and organisation of verifiable information, (2) risk assessment, and (3) risk mitigation measures. This process aims to ensure that the commodities and products are deforestation and forest degradation-free and produced in line with the relevant legislation of the country of production.

According to the draft regulation, the EUTR due diligence requirements would be “adapted and improved” through the introduction of several new features that include:

As this regulation is a legislative proposal, the specifics are subject to change. The introduction of the law will require reaching a consensus on a final text between the Parliament and Council. The timeline between a proposal being tabled and adopted (or not) varies widely depending on the degree of consensus and the priority attached to the legislation by the country holding the EU Council Presidency. For now, the timing is still uncertain, but it has been mentioned that it is a priority for France’s presidency between this month and June.