Deforestation law : are a delay and reopening needed ?

On November 14th, the European Parliament will vote on the proposal to delay the implementation of the law against deforestation. It follows a proposition of the European Commission, due to criticism from Europe’s trading partners. However, other players have been actively preparing for this regulation in the last months.

A historic law to protect forests

The figures have just been published: by 2023, almost 6.4 million hectares of forest had been cleared, equivalent to 5 times the surface area of the Île de France. An even larger area – 62 million hectares – has been degraded. 10% of this deforestation is linked to consumption in the European Union.

These figures are proof that attempts to voluntarily reduce deforestation are not working. Since 2014, with the New York Declaration for Forests, 140 countries and companies have committed to halving deforestation by 2020 and halting it by 2030. These targets are a long way from being met.

This law, passed two years ago, is a response to the ineffectiveness of this decade of voluntary commitments. In this respect, it is historic. It is intended to prohibit to place on the European market market palm oil, soya, cocoa, coffee, timber, beef and rubber if they have caused deforestation, forest degradation or human rights violations.

Yet today, it is in danger. Although it is due to come into force on December 30, the European Commission has just proposed a one-year postponement of its application date.

A relentless lobby

In recent months, we have witnessed a barrage of public and lobbying attacks against this text. The European Commission’s announcement of a potential postponement of the law follows unprecedented pressure from a wide range of players.

This lobby came primarily from a number of industries linked to deforestation, such as chocolate, palm oil, timber, paper, coffee and others.

Ministers from countries such as Indonesia, Malaysia and Brazil also criticized the law. But the strongest opposition came from within the European Union itself, and from Austria in particular.

The EPP, Europe’s right-wing party, also actively lobbied for the postponement.

Their arguments are diverse: some denounce a lack of clarity in the law, which prevents companies from preparing themselves, and a timeframe that is too short; others object to being affected even though they do not represent a risk of deforestation, and others are opposed to the environmental requirements in general.

In response to these criticisms, the European Commission published its long-awaited guidance on October 2… But it also announced that it was proposing a postponement of the law’s application date, initially scheduled for December 30, 2024.

In making this choice, the European Commission has given in to the lobbies. It has decided to ignore the 1.2 million citizens who called for this law, and to penalize companies that have been actively working on the sustainability of their supply chains in recent months.

Where do companies really stand?

While a few companies have dragged their feet, hiding behind the law’s lack of clarity, many others have got their act together. Canopée has published a report assessing the 22 largest companies in the palm oil, cocoa and soy sectors submitted to this regulation. It shows that many of them are already almost ready for the law to come into force.

In fact, the palm oil sector, which has been supported by civil society for over ten years, has already achieved non-deforestation guarantees for 81% of the volume studied. This was initially achieved through the use of certifications, but is now complemented by real additional traceability work and deforestation monitoring. This figure is of 47.6% in the cocoa sector. Although the figure is lower, we can see that significant progress has been made in recent years. In the soya sector, 53.8% of the volume studied is guaranteed to be deforestation-free. For this raw material, however, we note a significant traceability deficit that needs to be remedied to comply with the law. This sector is also characterized by a lack of transparency, a real obstacle to traceability work.

Logically, some of them have taken a clear stand against postponing and reopening this law. We organized a seminar to give these companies their say, and the message is clear: « Today, we have very good results, since almost 100% of our sourcing is guaranteed deforestation-free ”, explains Floriane Hédé, head of sourcing and traceability at Ferrero. « We need to hear a different story from the one we’re hearing in the media. It’s not consistent with everything we’ve been doing for months, » says Raphaël Latz, CEO of Louis Dreyfus. “All the cooperatives we work with are already able to provide full traceability,” adds Julien Tisserat, Ethiquable’s chain manager.

A wide range of examples of good practice

By examining the practices of numerous companies, our study identifies the keys to moving towards more sustainable supply chains.

The first essential element is knowledge of the supply chain, through traceability. A wide range of tools are available to support companies in this task. These tools are already widely used by the most advanced players, such as SourceMap, PalmTrace, FarmForce, the ZDC mechanism, etc., and enable them to identify the countries, regions, infrastructures, producer groups and plantations that supply them.

Once the plots of origin of the products have been identified, they can then be checked to identify whether they have been deforested in the past. Here again, a number of tools are available: Satelligence, Global Forest Watch, Starling, Agrosatélite and Earthqualizer are the most widely used. Guaranteeing that these supplies are not linked to deforestation is therefore largely technically feasible. It’s simply a question of will.

Finally, transparency is essential to facilitate traceability and control. Some companies, particularly in the soya sector, operate in a highly opaque way and refuse to share information on the origin of the products they sell, even with their customers. But others, particularly in the palm oil sector, show us that a transparent approach is entirely possible. Almost all the companies we studied that sell cocoa or palm oil have set up a system for sharing traceability information, not only between links in the supply chain, but also more widely: they make public the list of their suppliers.

Scattered misconceptions

In addition to the issue of companies’ lack of preparation, two elements are regularly put forward to attack the law. Firstly, it would exclude small producers from supply chains. While this question has the merit of being asked, given the share that these players represent in certain sectors (85% for rubber, 80% for coffee, 70% for cocoa producers, etc.), it is quite simply impossible to do without them. However, the traceability and sustainability work imposed by the European law against deforestation has a cost, which they will find it difficult to bear alone. Rather than threatening to exclude some of their suppliers, companies must support these producers, in particular by covering these costs.

Another common misconception is that this regulation would be a burden on European farmers, who would be subject to additional constraints, particularly in terms of traceability. This is not only false, but quite the opposite: this law represents a real opportunity for beef and soybean farmers. As their production is not associated with a risk of deforestation, they will have a comparative advantage over imports from other countries.

Dramatic consequences of postponement and reopening

If this law were to be postponed or reopened, it would pose a number of risks. For forests first of all. According to the European Commission’s own study, a one-year postponement directly threatens 230,000 hectares of forest, equivalent to 22 times the surface area of Paris. This would further accelerate greenhouse gas emissions, the collapse of biodiversity and the human rights violations associated with deforestation.

But it is also very serious for the companies that have been working hard in recent years to comply with the law. These companies have often been more discreet, and have taken less of a stance on the law, concentrating their efforts on obtaining guarantees of non-deforestation and traceability. Rather than encouraging their good practices, the European Union would be penalizing them directly by accepting this postponement. It would send a clear message: it is more profitable to invest in lobbying efforts than in sustainability.

Reversing the law against deforestation, which has already been in force for two years, also undermines political confidence in the EU. This law is one of the major achievements of the Green Pact for Europe, and was widely acclaimed by the public. Calling it into question sends out the wrong signal.

Worse still: to vote for this postponement, a new legislative process has been set in motion, and with it the possibility of amending the text. So it’s not just the application date that could change, but the whole law itself. The Parliament should vote for the proposition on November 14th. It must not be the occasion to water down this historical law. First of all, it would lead to a trialogue that would create a legislative mess. And it would also create a complete uncertainty for companies that have been preparing for this law. This law is crucial to setting up a level playing field and guaranteeing a fair competition and must not be changed.