What lessons should the EU learn from the Deforestation Regulation controversy?
The European Union’s Deforestation Regulation – passed in 2022 and intended to ensure that certain products imported into the EU do not contribute to deforestation – has triggered protest from trade partners and economic actors who say that the compliance system is not ready, causing the European Commission to propose a postponement of twelve months in its application date. Today the European Parliament also asked for amendments that would change its substance.
Postponement of implementation is justifiable, to give more time for the Commission to give better guidance on compliance. But the regulation should not be amended with a ‘no risk’ category added, as the Parliament has proposed, because that would increase forest destruction and add to uncertainty for economic actors. In 12 months, EU demand typically drives deforestation of 190,500 hectares, equivalent to three-quarters of Luxembourg’s territory.
EU demand drives 15% of global deforestation linked to trade, an outsized impact relative to its 5.5% of the world’s population. Moreover, a large majority of EU consumers want to avoid buying products that result from deforestation and find it difficult to find information on whether products are deforestation-free. Forest destruction destroys biodiversity, disrupts freshwater production and releases greenhouse gases.
There are important lessons to learn from this debate. The EU needs a more effective strategy for managing the external impact of the EU’s green agenda. Developing countries that are highly dependent on EU markets need specific financial and technical assistance to ease the transition to more sustainable production, to comply with EU requirements, and to build their own systems for preventing deforestation and improving forest protection. Economic actors need better consultation during the design stage, plus clearer, sector-specific guidance and a well-functioning system for compliance. Above all, the EU needs to maintain a consistent and reliable regulatory framework to incentivise sustainable agriculture and forestry.
Read the Policy brief 'Extra time for deforestation: lessons for future EU environmental legislation' by Heather Grabbe and Luca Léry Moffat.