Everyone seems to have a different opinion on the way that EUDR (the European Union Deforestation Regulator) assesses risks.
The new law divides countries into three risk categories: standard, high or low. Food businesses that source from a country with a higher risk will be required to do more due diligence.
The benchmarking of countries can have a significant impact on commodity sourcing. If a European company is asked to decide between purchasing soy in a low-risk and standard-risk country because of the paperwork involved, they may choose low-risk.
It is for this reason that country representatives call for reform of benchmarking.
Others want to pay more attention to high-risk categories, and others would like a new classification that is even lower risk than low-risk – ‘negligible risks’.
What is meant by a ‘negligible’ risk for EUDR
The majority of countries in the EU, and all other member states are classified as having low deforestation risk.
The best classification that a country could hope for is low risk. This classification tells companies they can get key ingredients in that country without a lot of paperwork or administrative burden.
What commodities are affected by EUDR?
EUDR covers the seven most closely linked commodities to deforestation – cattle, cacao, coffee, palm oil, rubber, soybeans, and wood.
The EUDR also covers products derived from such commodities.
For some states, “low risk” isn’t low enough. MEPs presented motions to the Commission earlier this month asking them to include a new classification in the EUDR system. The European Parliament’s ENVI Committee adopted these motions today.
The ‘negligible or no risk’ category means that relevant commodities can enter the EU without much or any scrutiny. According to Austrian MEP Alexander Bernhuber, this category will “reflect reality”, that the deforestation risk in certain countries is “effectively minimal” because of three factors: strong legal frameworks; low dynamics for land use change and sustainable land management.
Mathilde Andrét, a French MEP, called also for the creation of a list of countries that are deemed ‘negligible,’ and exempted from geolocation checks.
The ‘Negligible Risk’ Category has been adopted but there is still pushback
The ENVI Committee has adopted a motion to add a negligible-risk’ category. However, this does not mean that a new category will be included in the EUDR benchmarking. This is a first step in a possible policy shift.
Concerns have been raised about the addition of a category for ‘negligible risks’. Theoretically, an ingredient of product linked to illegal deforestation would be more likely to enter the EU via a country with a low risk rating and could then freely trade within EU member states.
The MEPs have called for countries that are deemed ‘low-risk’ to be classified as “negligible risks”. (Image: Getty/evandrorigon)
Bernhuber’s and Androuet’s proposed compensation mechanisms are also causing concern. A country would be able to achieve a reduced risk rating by reforesting in other areas.
Forest campaigners have taken to the streets, saying that MEPs gamble with forests, climate change, and rights of forest communities. Politicians who say they support competitiveness in business have created uncertainty and confusion, pushing countries and companies who invested heavily to prepare for this law.
The Commission must be firm. No more excuses.
Reevaluation is needed for risky countries
Only four countries have been classified as a high-risk country by the European Commission. No, these are not the most prominent countries in news stories about deforestation. Belarus, North Korea Myanmar, and Russia are all countries that have been sanctioned by the EU Council.
Read also: How much deforestation does EUDR “high-risk” countries have in reality?
Some MEPs feel that the classification of “high risk” doesn’t capture the deforestation hot spots around the world.
We understand that this means some countries labeled’standard risks’, such as Indonesia, Malaysia and Brazil, which are major producers of soya and beef, do not belong in the correct category. This is according to former shadow reporteurs for the EUDR, MEPs Renew, S&D and Greens, and other members from the political groups Renew and S&D. We strongly believe it is possible and urge that this be addressed quickly.
Does the ‘high-risk’ category accurately represent deforestation? “hot spots”? (Image: Getty/luoman)
This group is against a classification of countries based on ‘no-risk’ or negligible-risk’. They say that doing so would undermine EUDR’s objectives to combat deforestation. It’s not time to introduce legal uncertainty when companies in the EU already invested substantial resources in order to comply with EUDR.
It is clear that the EUDR will soon be something very different than what was initially agreed. The final version of the EUDR may be very different than the original one. This is after a long delay, and several rounds of simplifying.