Over the years, I have found there is a tendency for business regulatory change to be viewed as a hurdle to overcome rather than an opportunity to embrace. In the case of the new European Union Deforestation Regulation (EUDR), I eagerly encourage Pacific businesses, governments and development partners to adopt the latter as an opportunity for an infinitely more appropriate outlook.
The EUDR represents one of the most ambitious global policies and a significant shift in agrifood supply chain regulations. It is a new policy by the European Union (EU), designed to combat global deforestation and ensure transparency, responsibility and sustainability along supply chains. For forward-thinking, agile and sustainable businesses, it also denotes a golden opportunity to lead in the new world of EU standards.
Introduced in 2023, and set to be fully implemented by January 2026, the EUDR replaces the European Union Timber Regulation (EUTR), which was introduced in 2013 to ensure the sustainable sourcing of wood products entering Europe. The EUDR draws on its predecessor’s learnings, and extends the scope of regulation to other commodities.
The EUDR requires companies trading in cattle, cocoa, coffee, palm oil, rubber, soya and wood as well as products derived from these, such as chocolate, leather, tyres and furniture, to conduct due diligence on the supply chain to ensure the goods do not result from land that has been deforested since December 2020, and that all materials have been legally sourced and processed. There is also scope within the legislation to include other products if they are found to be contributing to deforestation.
Operators and traders, including importers, distributors or wholesalers, bringing these products into Europe, will be required to provide proof of origin paperwork and risk assessments and undergo customs checks. Penalties for noncompliance include fines, confiscation of goods, and market bans.
While this calibre of regulation is already familiar to the timber and palm oil trades and the fishing industry, the EUDR is a significant evolution of import standards, and sets a new global benchmark in responsible environmental sourcing. The EU has historically been influential in sparking international legislation developments, suggesting that other markets may follow suit in the course of time.
As with all market changes, the EUDR does present challenges for businesses trading within the EU remit. These challenges include increasing the burden of compliance, technological barriers and costs and communication obligations within the supply chain. In the case of the Pacific, these challenges are compounded by national regulatory frameworks and the nature of informal trade.
However, these are not challenges to be met by businesses alone. The implementation of the EUDR represents a change to be navigated by ongoing collaborative action from governments, business and development partners. Further, for smaller nations with strong relationships along local supply chains, the EUDR presents a concrete opportunity for Pacific businesses to gain a competitive global edge. Together, we can position the collective Pacific brand as a compliant leader in sustainable trade within Europe.
Pacific businesses that export coffee, cocoa,palm oil and wood can begin preparing for the full implementation of the EUDR in 2026, by collecting needed information. This includes the latitude and longitude of farms where product is grown, evidence that these areas have not been deforested since 2020, and proof that all businesses along the supply chain comply with local laws, especially those that relate to land use, environment, human rights, indigenous peoples, labour, trade and taxes.
It is also important to take a step back and remember that the EUDR represents a substantial move forward for people and planet. It sets out to “guarantee that the products EU citizens consume do not contribute to deforestation or forest degradation worldwide” (European Commission). It is also a monumental move towards a world that supports the ability of the Pacific, and the Pacific way, to thrive and flourish. As such, I look forward to working hand in hand with Pacific businesses to support the EUDR in return as we traverse these changes together and transform them into a strategic asset.
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