MN23-10: European Union Deforestation Regulation

28 November 2023

Purpose

This Industry Advice Notice (IAN) is to alert exporters of products to the European Union (EU) of new EU regulations that will place obligations on entities placing and making available on the EU market cattle, cocoa, coffee, oil palm, rubber, soya, wood, and some products containing, having been fed with or having been made using these commodities.

This IAN provides an introduction to the European Union Deforestation Regulation (EUDR) that will apply from 30 December 2024. The Australian Government will provide updates on the EUDR as new information becomes available to assist Australian exporters of affected commodities and products.

Many of the implementation details of the EUDR are still to be determined by the European Commission (EC). The below information is therefore provided to alert Australian exporters but is not intended to substitute specific commercial or legal advice. Implementation of the EUDR is ultimately the responsibility of the EC and EU Member States. Australian entities may wish to seek specific advice applicable to their business.

Overview of the EUDR

• From 30 December 2024, the EUDR will require certain operators placing cattle, cocoa, coffee, oil palm, rubber, soya, and wood, as well as some products containing, having been fed with or having been made using those commodities such as beef and leather (but not dairy products), on the EU market (see Annex 1 of the Regulation for the full list of products) to conduct due diligence to ensure these commodities and products were not produced on land subject to deforestation or forest degradation after 31 December 2020, and they have been produced in accordance with relevant laws of the country of production.

• Operators who place commodities or products on the EU market will need to provide the EU competent authorities with a due diligence statement produced prior to the product’s arrival to demonstrate their imports are not associated with deforestation or forest degradation. This statement must include geo-coordinates of all production locations for the commodity up to the point of processing (such as birth to slaughter for cattle), and as part of the due diligence process should include information to demonstrate that the relevant laws in the country of production have been complied with.
• Australian producers and exporters of affected commodities who supply commodities or products to EU entities for placement on the EU market will need to provide this information to enable EU operators to undertake due diligence.
• Failure to provide the necessary information may result in consignments being held at the EU border, returned, or destroyed.

Exporter responsibilities

• To export any of the regulated commodities or further select products containing, having been fed with or having been made using these commodities to the EU such as beef, Australian exporters may need to assist EU operators in gathering the following information:
  • a description, including the trade name and type of relevant products
  • for wood products, the common name of the species and its full scientific name
  • the list of relevant commodities or products contained in, or used to make, those products,
  • product quantity (expressed in net mass, volume, or number of units),
  • identification of the country of production,
  • geolocation of all plots of land where the commodities that the relevant products contain, or were made using, were produced or the geolocation of the establishments where cattle were kept.
  • date or time range of production,
  • evidence that the commodities were legally produced,
  • adequately conclusive and verifiable information that the relevant products are deforestation-free, and
  • details of the supply chain.
• The geolocation information required under the EUDR includes at least one latitude and one longitude coordinate using at least six decimal digits. Areas larger than four hectares will require sufficient latitude and longitude points to describe the perimeter of the plot of land, except for cattle where a single point can be used as the geolocation coordinate for each establishment the cattle is kept during its lifetime.
• Where the product contains or has been made using commodities produced on different plots of land, the geolocation of all plots of land must be included.
• Relevant commodities and products shall not be placed on the EU market if they are from land that has undergone deforestation or forest degradation after 31 December 2020 or have not been produced in accordance with the relevant legislation of the country of production.

Country Benchmarking System

• The EUDR establishes a country benchmarking system, which will apply a deforestation risk-rating (low, standard, or high) to each country.
• All countries have been designated as standard risk until a risk assessment has been completed.
• A country’s risk rating will determine the percentage of consignments inspected at the EU Member State border by its competent authority. However, EU operators will need to collect information on their supply chains to meet the due diligence requirements regardless of the exporting country’s risk rating.
• The European Commission will determine and publish country risk ratings no later than 30 December 2024, the date the EUDR will start to apply.

Potential implications for Australia’s production forests

• The EUDR defines multiple forest types (primary forests, naturally regenerating forests, planted forests and plantation forests) that are relevant to the forest degradation definition. It does not differentiate between different forest types when defining what constitutes deforestation (other than agricultural plantations such as fruit trees and olive orchards that are excluded from the definition of ‘forest’).
• Given this, harvesting of any forest type (that otherwise meets the definition of a ‘forest’ as described below) for timber, whether a plantation or native forest, could be classified as deforestation if the land is subsequently used for agriculture.
  • The timber harvested or agricultural commodities that are subsequently produced on the land might not be eligible for export to the EU.
• The harvesting of timber from intensively-managed plantations (that meet the EUDR definition of a ‘plantation forest’) that are subsequently replanted (not converted to agricultural use), or from native forests where natural or predominantly natural regeneration follows harvest, will not fall within the definitions of deforestation or forest degradation under the EUDR.
  • Timber from these types of production forestry may still be traded into the EU, as long as the due diligence obligations are met.
• The conversion of primary forests into plantation forests or planted forests would constitute forest degradation under the definition given in the EUDR.
  • Timber harvested from forests undergoing conversion and from subsequent plantations may not be able to be traded into the EU due to the forest degradation classification.
  • Assisted natural regeneration following harvest of a primary forest could constitute forest degradation under the EUDR should planting or seeding account for more than 50 per cent of the subsequent growing stock (which the EUDR would define as a ‘planted forest’).
• ‘Forest’ under the EUDR differs from the Australian definition.
  • The EUDR definition of ‘forest’ means land spanning more than 0.5 hectares with trees higher than 5 metres and a canopy cover of more than 10%, or able to reach these thresholds, and excludes land predominantly under agricultural or urban use.
  • By contrast, in Australia, a forest is defined as land dominated by trees higher than 2 metres and a crown cover of more than 20% or able to reach these thresholds and does not exclude any agricultural land (see Australia’s State of the Forests Report 2018).
• The Australian Government continues to seek information from the ECon the application of provisions related to production forestry, as the scenarios and outcomes above are yet to be confirmed by the EC. Australian entities may wish to seek specific advice applicable to their business.

Potential implications for Australia’s beef exports

• The EUDR defines ‘deforestation’ as the conversion of forest to agricultural use, whether human-induced or not. Land used for the purpose of rearing livestock is included in the definition of ‘agricultural use’.
• ‘Other wooded land’ is defined in the EUDR as a category of non-forest land for the purposes of ‘forest degradation’ but is not currently captured in the definition of deforestation. The EC will assess whether other wooded land should be covered by the EUDR one year after implementation.
• The EUDR will apply to cattle, beef, offal and leather entering the EU, among other products. Exporters will also need to provide geolocation information, including the establishments where the cattle were kept.

Further information

The full text of the EUDR (EU 2023/1115) can be found on the Eur-Lex website.

The Department of Agriculture, Fisheries and Forestry encourages exporters to familiarise themselves with the EUDR and its implications. Further information can be found at:

• Preferred By Nature Webinars – EUDR Introductory information
• PEFC Webinar - Introduction to the new EUDR
• International Trade Centre (ITC) and World Resources Institute (WRI) Roundtable recording - Deforestation-Free Global Value Chains

This IAN has been prepared to assist exporters understand their due diligence obligations when exporting to the EU. It does not constitute legal advice. Exporters may wish to seek independent advice based on their circumstances.

The information provided in this notice is current at the date of issue and is intended for use as guidance only. The Commonwealth has exercised due care and skill in the preparation of this information but we do not warrant its accuracy, completeness or suitability for any purpose. Information may be subject to change without notice.

To the maximum extent permitted by law, the Commonwealth will not be liable for any loss, damage, expense or cost incurred by any person directly or indirectly as a result of relying on information contained in this notice.

Contact information

If you have any questions about this IAN or the EUDR, please contact the department at Europe.tmad@aff.gov.au.