Unpacking the EU Deforestation Regulation: Opportunities and Challenges for African Agricultural Exporters
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Introduction
The permanent destruction of forests is a pressing environmental issue that has far-reaching consequences for our planet and its inhabitants. The alarming rate of deforestation, largely driven by human activities such as agriculture, urbanization, logging and illegal mining in forest areas, has resulted in the loss of millions of hectares of forestland each year.
The Food and Agriculture Organization of the United Nations (FAO) estimates that 420 million hectares of forest—about 10 % of the world’s remaining forests, equaling an area larger than the European Union – have been lost worldwide between 1990 and 2020. This not only harms biodiversity but also contributes significantly to climate change. Deforestation alone accounts for 11% of greenhouse gas emissions, as stated in the Intergovernmental Panel on Climate Change (IPCC) special report on climate change and land of 2019.
In light of the devastating effects of deforestation, the European Union has passed a vital legislative tool that will help address global deforestation and forest degradation. In this article, I’ll break down this deforestation regulation and what it means for the African economy and exporters.
What is the EUDR?
The European Union Deforestation Regulation (EUDR) is a groundbreaking legislation that prohibits companies from placing products linked to deforestation and forest degradation on the EU market after 2020. Adopted in December 2022 after years of negotiations, the EU Deforestation Regulation covers commodities such as cattle, cocoa, coffee, palm oil, soy, and wood, along with their derived products like leather, chocolate, and furniture.
Key Elements
Companies importing or exporting covered commodities and products to/from the EU must conduct due diligence to ensure their supply chains are deforestation-free. This includes gathering information, assessing risks, and mitigating them. Companies must appoint compliance personnel, and EU authorities will conduct risk-based checks and audits. Violations can result in fines up to 4% of a company’s annual EU turnover, product confiscation, and temporary market access denial.
Punitive Measures and Certification
The EU Deforestation Regulation allows for stringent punitive measures against non-compliant companies, including fines, product confiscation, and temporary market access denial. However, while certification schemes can be used as information sources, they cannot substitute a company’s due diligence obligations.
Impact on Agricultural Exporters
For agricultural commodity producers exporting to Europe, the regulation presents challenges in enhancing transparency and sustainability practices throughout their supply chains. However, it also provides an opportunity to differentiate as suppliers meeting stringent environmental criteria and potentially command premium prices.
Implications for Africa’s Economy
In Africa, where many nations are net food importers despite abundant arable land, the EU Deforestation Regulation could inspire more sustainable domestic production for consumption and export. However, technical and financial assistance from governments, NGOs like the Roundtable on Sustainable Palm Oil (RSPO), and the private sector may be required to enable smallholder participation in deforestation-free supply chains.
The Role of Governments and NGOs
Governments and NGOs have a crucial role in supporting the transition to deforestation-free supply chains, particularly for smallholders. The EU Deforestation Regulation emphasizes the need for partnerships and cooperation mechanisms, including structured dialogues, administrative arrangements, joint roadmaps, and ensuring the participation of all stakeholders, including indigenous peoples, local communities, and smallholders.
My Opinion: Opportunities and Challenges for African Exporters
The EU Deforestation Regulation presents both opportunities and challenges for African agricultural commodity exporters to Europe. On one hand, it incentivizes sustainable land use practices, respect for indigenous rights, and investments in transparent, deforestation-free supply chains. This could open up new market opportunities for responsible African producers who can differentiate themselves and potentially command premium prices.
However, the due diligence requirements, traceability demands, and risk of punitive measures also pose significant hurdles, especially for smallholder farmers who may lack the resources and capacity to comply. Robust support from governments, NGOs like RSPO, and the private sector will be crucial in providing technical assistance, training, and access to financing to help smallholders participate in these deforestation-free supply chains.
Next Editorial: The EU Deforestation Regulation’s Impact on Africa’s Timber Industry
In our next editorial, we will examine the specific implications of the EU Deforestation Regulation for Africa’s timber industry. Many African nations are major exporters of wood and wood products to Europe, and the regulation’s stringent requirements around forest degradation could significantly disrupt these trade flows.
We will explore how the EU Deforestation Regulation’s definitions of degradation and deforestation might impact logging concessions, plantation forestry, and the livelihoods of communities dependent on these activities. Additionally, we will assess the role of initiatives like FLEGT licenses and certification schemes in demonstrating compliance with the EU Deforestation Regulation’s criteria
Check also: Cultivating Sustainability: RSPO’s Support to African Smallholder Palm Oil Farmers
