On December 22, 2024, the European Union announced a new regulation focusing at deforestation, which has led to the loss of 420 million hectares of forest globally from 1990 to 2020.
The regulation targets various agricultural products, including palm oil, soy, coffee, cocoa, and rubber, which have been identified as major contributors to deforestation. The EU aims to establish a market free from products linked to deforestation, necessitating that companies demonstrate compliance through traceability systems.
While the legislation has received positive feedback, concerns have been raised regarding the potential costs for businesses to adapt their supply chains and implement due diligence systems. Monitoring and verification of supply chains may pose challenges, particularly in regions where sustainability measures are hard to enforce.
Small and medium-sized enterprises are expected to face significant hurdles due to their limited resources. Initiatives like COPADE’s ASG Footprint are designed to assist these businesses in measuring their social and environmental impact, facilitating their transition to sustainable practices.
The regulation is anticipated to have broader environmental benefits, including aiding in the fight against climate change by preserving forests, which are critical carbon sinks. Effective management of forests is essential for reducing carbon footprints and mitigating the effects of global warming.
In Europe, forests are in need of management to reduce excessive biomass and enhance resilience against climate stressors and wildfires. This regulation is not only an environmental safeguard but also intersects with public safety concerns.
Overall, while the new EU regulation presents challenges for producers and marketers, it is poised to advance global forest protection and biodiversity efforts, emphasizing the need for tailored approaches to different regional contexts.