EU Deforestation Regulation

01/07/23

As you are probably aware, the European Union has passed a new law that covers imports into, or exports from the EU, including all cattle, cocoa, coffee, palm oil, soya, rubber, and wood. These products must be deforestation-free, and produced in accordance with the relevant legislation of the country of production and be covered by a due diligence statement. This new law starts as of December 30th 2024. While the EU is at the forefront with this regulation, the industry sees this as global in practice and expansion is inevitable. 

 

This regulation restricts the selling of the above listed products within the EU, unless they: 

(i) have not been produced on deforested or degraded land (with a cut-off date of December 31st 2020),

(ii) have been produced in accordance with legislation of the country of production, 

(iii) are covered by a due diligence statement. This statement must be issued per bill of lading. 

 

The due diligence statement must include the geolocation of all plots of land for production (including a polygon map for all plots larger than 4 hectares), a date or time of production, and a disclosure ensuring that due diligence was carried out to no or only “negligible risk”, and at an “adequately conclusive and verifiable” level. This data must be collected and stored for five years and GPS location/polygon data must be updated regularly. 

 

In the context of this regulation, ECOM plays a unique role as a supply chain actor, importer, and exporter. In some cases, we will be responsible for submitting the official Deforestation Due Diligence statement to the EU platform; this might be with data from our own supply chain or data from a third party actor that we will be responsible for assessing. In other cases, as a supply chain actor with an origin integrated purchasing model, ECOM will continue to be responsible for providing the data and due diligence assurance to our clients, even when we are not the direct importer.

 

It is clear that trade will be a key participant in our path for EU compliance, especially as the relationship managers for our partner supply chain. Further information will be shared in the near future with the internal ECOM teams to explain the upcoming EU regulations, what they mean for ECOM, and the role trade will need to play.

 

For now, leveraging the expertise gained in our supply chains and working with the vast knowledge within our company, a cross functional team is currently working on supporting our readiness for the upcoming EU regulations for ourselves and for our partners. This team includes members of Integrity, SMS, carbon, E&S, legal, research, technology, data, and transformation. 

 

We are pleased to also share that ECOM has an aligned group statement that has been shared with our trade teams in use in response to client requests regarding our position/response to the upcoming EU Regulations. The purpose of this statement is only for use in response to a direct message from a client/counterparty asking for a statement from ECOM regarding the upcoming EU Deforestation regulation. Please reach out to contact Katharine Halle if you need a copy of this statement. 

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