Executive Director
American Hardwood Export Council
www.ahec.org
The short answer is “maybe”, but don’t count on it. In recent months there have been numerous calls to delay implementation of the EU Deforestation Regulation (EUDR) with mounting evidence that neither the regulators nor industry are adequately prepared. The loudest calls for delay are now coming from within the EU itself as some government officials and many industry groups have become alarmed that the challenges of implementation will undermine the competitiveness of European industry and contribute to inflationary pressures in the food sector.
The first signs of internal dissent came on March 12 in a letter sent to the EC signed by six European wood industry organizations calling for a delay to EUDR implementation. Signatories to this letter were the European Confederation of Woodworking Industries (CEI-Bois), the European Furniture Industries Confederation (EFIC), the European Organization of the Sawmill Industry (EOS), the European Panel Federation (EPF), the European Timber Trade Federation (ETTF), and the European Federation of the Parquet industry (FEP). This was followed on March 13 by a similar letter signed by 19 wood trade organizations in France sent to the French Environment Minister.
The calls for delay escalated in a meeting of the European Agriculture and Fisheries Council on March 26 when Agriculture ministers from 20 of the EU’s 27 member countries supported a call by Austria to revise the law. On the doorstep of that meeting, the German Federal Minister of Food and Agriculture called explicitly on the EC to “urgently extend the actual transition phase [of EUDR]” suggesting that “if it does not quickly succeed in doing so, the law cannot be implemented in Germany as it would result in an unbearable workload for our economy, but especially for our [Competent Authority] and SMEs”. These concerns were aired again in May at a meeting of the EU Member State Working Party of the Environment by Sweden, Czechia, Slovenia, Romania, Bulgaria and Ireland. The EU Agriculture Commissioner Janusz Wojciechowski then spoke out in favor of postponement for a year at the EU Agriculture Council in May, the first time a representative of the EU Commission had broken ranks in public on this issue.
Despite all the political noise, in practice there is no simple legal mechanism to delay or alter the text of EUDR at this late stage. The law is already on the books and was jointly endorsed only 12 months ago by the European Parliament, Council, and Commission. The mandate for introducing the law does not lie with the EC Agricultural Commissioner or the Member State Agricultural Ministers leading the calls for delay, but with the EC’s DG for Environment that is resisting any suggestion of a delay. Green groups are campaigning vigorously to demand that EC keeps to the original timetable. The only conceivable way to change or formally delay the law would be to alter the composition of the European Parliament and Commission in such a way that these institutions might prioritize such a move.
For this reason, all those impacted by EUDR are closely watching the results of the European Parliamentary elections held June 6-9 in expectation of a swing to the right which might encourage dramatic changes in the make-up of the European Parliament and leadership at the European Commission. The results to date1, while revealing a big surge in support for right wing groups in the largest EU Member States (France, Germany, and Italy), in practice haven’t shifted the needle a huge amount at the EU level. The EU constitution is so arranged that smaller countries have a relatively larger role in political decision making at the EU level.
Nevertheless, the timing and implementation process for EUDR could still be strongly influenced by the coalition building now on-going in the European Parliament following the election as the various groupings negotiate to create a stable majority. The centrist parties will likely need the support of either the Eurosceptic ECR group, which includes the Italian PM Giorgia Meloni’s Brothers of Italy party, or of the Greens to form this majority. The Greens lost a few seats in the parliamentary election but are still large enough to be an influential partner in a coalition. They would likely make continued commitment to the existing Green Deal measures a condition of their support. The ECR group that gained a few seats would be much more focused on cost and competitiveness issues and inclined to support delays and potential changes to laws like the EUDR.
Therefore, there is still considerable uncertainty over just how far and fast EUDR enforcement measures will be imposed in the EU. At present, given the significant legal obstacles to any official change in the law, the working assumption must be that the official timetable will remain unchanged, and enforcement will begin on December 31, 2024. However, it is equally clear that regulators both in the Commission and Member States are not at all prepared to effectively enforce the law. Numerous legitimate concerns are now being raised around the state of readiness of the Information System being set up to accept all the millions of due diligence statements to be submitted by EU operators every day and the fact that many Member States have yet even to appoint an agency to enforce EUDR. Those that have appointed an agency have yet to recruit anything close to the numbers of staff required to do the job. The necessary sector-specific guidance has yet to be issued by the Commission. And the delay to the country benchmarking means that the “simplified” due diligence procedures for low-risk countries are unlikely to be available until the second half of 2025. This creates significant problems for internal EU trade as many regulators and operators inside the region are relying on the low-risk designation to keep down the costs of both enforcement and implementation.
Taking all this into account, the expectation is that, while a formal delay is unlikely, there may well be an “informal” transition period of perhaps one to two years when sanctions will not be imposed and both regulators and businesses will be given time to become accustomed to the requirements and to work out how best to deliver against the legal objectives. The extent of “flexibility” allowed in interpretation might well vary between member states, and the extent to which the EC chooses to force individual Member States to strictly adhere to the requirements, and the timing of this, will depend partly on the composition of the ruling coalition in the European Parliament and partly on the outcome of the French election.
In the interim, AHEC continues to work with stakeholders both in the US and Europe to continue to push for a delay while simultaneously seeking to further develop a mechanism to provide robust assurance to EU regulators and consumers that deforestation to agriculture is practically non-existent in the US, and to demonstrate the provenance of US hardwood products placed on the European market.
Visit www.ahec.org for more information.
1At time of writing on June 17, 17 of the 27 Member States had published final results and 10 Member States had published preliminary results. The overall trend is not expected to change significantly.1
