The European Union reached a preliminary agreement on new legislation to prevent companies from selling on the European market coffee, beef, soy and other products that contribute to deforestation around the world.
The legislation, which still needs to be formally adopted by the European Parliament, requires companies to prepare a due diligence statement showing that their supply chains do not contribute to deforestation before selling their products in the EU, otherwise they can to face hefty fines.
“I hope that this ground-breaking regulation will give a boost to the protection of forests around the world and inspire other countries,” said European Parliament negotiator Christoph Hansen.
Deforestation is a major source of greenhouse gas emissions that drive climate change and will be at the center of this week’s UN Biodiversity Summit in Montreal (COP15). It is expected that the countries will make efforts towards a global agreement for the protection of nature.
The new EU restrictions will apply to soya, beef, palm oil, wood, cocoa and coffee, as well as some products derived from them, including leather, chocolate and furniture. Rubber, charcoal and some palm oil derivatives were included at the request of EU lawmakers.
Companies will have to certify when and where products were produced and provide “verifiable” information that they were not grown on land deforested after 2020.
Fines for non-compliance with the new measures are expected to reach 4 percent of the company’s turnover in the relevant European country.
According to the countries that will be affected by the new rules, including Brazil, Indonesia and Colombia, these measures are onerous and expensive. Supply certification is also difficult to track, especially as some chains can span multiple countries.
EU countries and the European Parliament must now formally approve the legislation. The law could take effect 20 days later, after which large companies would have 18 months to comply, and smaller firms 24 months.