The EU’s deforestation-free supply chain future

It’s been something that’s been talked about for some time, but the final detail of what the European Union’s new regulation on deforestation-free supply chains looks like has emerged with agreement reached between the European commission and parliament. A process of ratification lies ahead, but the finalised regulation has been generally well received. 

The headline is that import into the EU of any products linked to deforestation will be banned, meaning that many household goods will be subject to strict checks. The regulation will cover palm oil, cattle products, soy, coffee, cocoa, timber and rubber, and any products derived from these commodities. Companies will have to prove that what they import is not linked to land that was deforested after December 2020. The European commission’s impact assessment says that the regulation will protect 72,000 hectares of forest and cut global carbon emissions by 32m tonnes every year. 

One criticism of the regulation is that hoped-for rules on the need to protect the land rights of indigenous peoples and local communities – often referred to as the guardians of the forest – have not been as strictly included as had been expected. The European parliament had voted in September to make the right to free, prior and informed consent – or FPIC – and respect for other human rights a prerequisite for importing products into the EU. 

In the final agreement, however, this has been watered down to a requirement for companies to do so only if such rules are in force in the laws of the country of production. In addition, concerns remain over the ability of the regulations to recognise an imperfect but improving situation such as where companies are working to eliminate remaining pockets of deforestation from supply chains.  

In the run up to the biodiversity COP15 in Montreal, Canada, CDP data from 2022 demonstrates that only 31% of companies have made public commitments on biodiversity or biodiversity-related initiatives. A further 25% have plans to do so within the next two years. CDP says that while commitments are to be welcomed, there is not much sign of actual progress. Over half of companies with public commitments have not taken action on biodiversity in 2022, for example. 

The World Benchmarking Alliance’s Nature Benchmark assesses 400 companies in eight sectors on how well their activities are aligned to the goals of the Global Biodiversity Framework. They have found that public scrutiny can pay dividends as some of the best performing companies had previously been under pressure to change. Positive, systemic transformation is possible when companies make concerted effort to improve on their environmental performance, the alliance says. 

A key finding is the necessity for companies to look beyond their climate goals to contribute to a nature-positive economy. However, while 50% of the companies in the Nature Benchmark have greenhouse gas reduction targets, only 5% have carried out science-based assessments of how their operations impact on nature and biodiversity. 

There were some interesting winners of this year’s Earthshot Prize, the scheme set up by the now Prince and Princess of Wales to direct £50m to climate solutions innovators through to 2050. Each year five winners will receive £1m in grant funding. Among the 2022 winners are UK start-up Notpla, which has developed biodegradable packaging made from seaweed, that can be used as a replacement for the hard-to-recycle plastic sachets for sauces, for example. Notpla is already working with some big names including Just Eat, Unilever and Lucozade. 

The other winners included a project supporting Indian smallholder farmers to develop more resilient, low carbon, agricultural techniques and a Kenyan project to supply cleaner cooking stoves and fuels.