28 November 2023
Purpose
This Industry Advice Notice (IAN) is to alert exporters of new European Union (EU) regulations on cocoa, coffee, oil palm, soya, wood, and some products containing, or having been made using these commodities.
Summary of changes and key points
- The European Union Deforestation Regulation (EUDR) will apply from 30 December 2024.
- Many implementation details of the EUDR are still to be determined by the European Commission (EC). The information provided in this IAN is intended to assist exporters in understanding their due diligence obligations when exporting to the EU. It does not constitute legal advice and exporters may wish to seek independent advice based on their circumstances.
- The EUDR may have potential impact on Australia’s production forests.
- The EUDR will introduce a country benchmarking system that will provide a risk rating to each country, determining the number of consignments that will be inspected at the EU border.
- We will provide updates on the EUDR as new information becomes available to inform exporters of affected commodities and products.
Background
- From 30 December 2024, the EUDR will require certain operators exporting commodities or products for the EU market (see Annex 1 of the Regulation for the full list of products) to conduct due diligence to ensure these commodities or products were not produced on land subject to deforestation or forest degradation after 31 December 2020.
- 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 exports are not associated with deforestation or forest degradation. This statement must include geolocation of all production locations for the commodity up to the point of processing 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 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.
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 EC will determine and publish country risk ratings no later than 30 December 2024 to align with the start date of the EUDR.
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’).
- Harvesting of any forest type for timber, whether a plantation or native forest, could be classified as deforestation if the land is subsequently used for agriculture.
Note: Timber or agricultural commodities subsequently produced on this land may not be eligible for export to the EU.
- Timber harvested from intensively managed plantations that are subsequently replanted 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.
Note: Timber from these types of plantations may still be traded into the EU, if the due diligence obligations are met.
- Conversion of primary forests into plantation forests or planted forests would constitute forest degradation under the definition given in the EUDR. 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% of the subsequent growing stock (defined as a ‘planted forest’).
Note: 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.
- ‘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 [Australia’s State of the Forests Report 2018].
- We continue to seek information from the EC on 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.
Exporter responsibilities
We encourage 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
- If exporting any of the regulated commodities or products, 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 commodities were produced or were made using the commodity
- 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
- details of the supply chain.
- The geolocation required under the EUDR includes at least one latitude and one longitude coordinate using at least 6 decimal digits. Areas larger than 4 hectares will require sufficient latitude and longitude points to describe the perimeter of the plot of land.
- 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 has not been produced in accordance with the relevant legislation of the country of production.
Contact information
If you have any questions regarding this IAN or the EUDR, please contact Europe Trade Market Access Division.
Rossana Carr
Acting Assistant Secretary
Plant Export Operations Branch