The case

Draft Regulation of the European Parliament and of the Council on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010. The proposed regulation also covers European financial institutions. For more see link.

Source: Council of the European Union 24 June 2022 (OR. fr, en)

The commentary

A recent European survey found that 82 per cent of respondents believe that companies should not sell products that are linked to the destruction of forests. 70 percent would be willing to stop buying products from companies that contribute to deforestation. According to the survey, the risk of losing forest-sensitive customers is particularly high in Italy and Spain. Fewer and fewer consumers want to worry about products being associated with the destruction of nature and the loss of biodiversity. The measure proposed by the European Parliament now puts the onus on national governments to actively protect forests. This includes stricter definitions of deforestation and forest degradation as a measure against destructive logging practices. The list of goods and products covered by the legislation has been extended to include rubber, maize, poultry and meat (pork, beef and goat meat), which are included in the Commission’s proposal (palm oil, soya, coffee, cocoa, timber and beef). Also of fundamental importance is the extension of the Regulation’s competences to European financial institutions, whose investments may not flow into projects and companies linked to the destruction of forests*. Parliament also confirmed the need for mandatory traceability and transparency along the entire supply chain, including the country of origin of products and raw materials. Furthermore, it ruled out exemptions in controls for companies or products that already apply voluntary certification schemes to reduce deforestation. (Anton Ladner, Economic journalist).

Opinion pool

*Although limited to European financial institutions, Swiss financial institutions would probably not be able to escape this regulation.

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