What's there to know about the EU Deforestation Regulation

The main driver of deforestation is the expansion of agricultural land. As a major economy and a consumer, the EU is partly responsible for global deforestation which is a major cause of biodiversity loss and greenhouse gas emissions. The Deforestation Regulation will start to apply from 30 December 2024 and it marks an important turning point in the global fight.

What we talk about when we talk about deforestation

The objective of the Deforestation Regulation is to minimise the EU's contribution to global deforestation and forest degradation and to reduce the EU’s contribution to greenhouse gas emissions and global biodiversity loss.

Deforestation = conversion of forests to agricultural use
Forest degradation = conversion of naturally regenerating forests into plantation forests

Starting from 30 December 2024, only deforestation-free commodities and products may be placed on the EU market or exported from the EU.

Deforestation-free = produced on land that has not been subject to deforestation or forest degradation after 31 December 2020

Commodities and products covered:
‍
Cattle
Cocoa
Coffee
Palm oil
Rubber
Soya
Wood
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And derived products, such as chocolate, palm oil based derivates, tyres, furniture, printed paper...

What is expected of operators and traders

Operators and bigger traders (non-SME) must exercise due diligence for all relevant products provided by a supplier. For commodities and products from low-risk countries, a simplified due diligence will suffice.

Due diligence involves these steps:

1) The collection of data
Operators and traders must collect relevant information, data and documents relating to the origin of the product, including the geolocation of all plots of land where the relevant commodities were produced, and date and time of production of the product.

2) Risk assessment
On the basis of collected information, operators and traders must carry out a risk assessment to determine whether there is a risk the product is non-compliant with the Regulation. The risk assessment must be repeated once a year.

3) Risk mitigation
If the risk assessment reveals there is a non-negligible risk of non-compliance, procedures and measures must be taken to mitigate the risk, for example requesting additional information or carrying out independent audits.

Due diligence statement
To prove that the due diligence has been carried out, operators and traders will have to submit due diligence statements via a centralised information system, the Deforestation Due Diligence Registry (DDDR) before placing the products on the market or exporting them. The DDDR will be open for registrations in November 2024 and will be opened to all users in December 2024. After submission of the statement, operators and traders will get a reference number, which will be then used for customs.

Compliance with the rules - who will ensure it and how

Short answer: The national authorities of the EU Member States.

Long answer: The national authorities will carry out checks on operators and traders. The Deforestation Regulation not only imposes obligations on operators and traders, but Member States, too - Member States are required to report to the Commission and the public on the application of the Deforestation Regulation. What is more, minimum inspection rates for the Member States apply, depending on the classification of the countries (low-risk, standard-risk, high-risk).

The penalties for infringements of the Deforestation Regulation are up to the Member States but they must be effective, proportionate and dissuasive. They can take various forms, such as fines, confiscation of products and incomes, prohibition of placing products on the market or exporting them, or disqualification from public procurement procedures and access to public funding.

In Czechia, the national authority responsible for overseeing compliance with the Regulation shall be a brand new authority under the Ministry of Agriculture, called the National Forestry Institute, together with other relevant authorities, such as the Czech Trade Inspection Authority or regional hygiene stations. The proposed penalties are fines of up to 4% of annual turnover and other penalties in line with the Regulation.