How Can the New EU Regulation Achieve Deforestation-Free Supply Chains?
The European Union’s recent legislation to reduce commodity-driven deforestation is an important step toward preventing further biodiversity loss and combating climate change. But its effectiveness depends on capturing granular data on smallholder farmers operating in informal supply chains.
MONTREAL – Deforestation, which accounts for roughly 25% of global greenhouse-gas emissions, is primarily driven by commodity production for global markets. Legislation recently enacted by the European Union aims to curb deforestation by banning the import of commodities and products linked to it. The measure represents an important step forward, but gaps in critical data are set to undermine its effectiveness.
The new law requires companies to provide a due diligence report detailing the “country of production,” “geographic coordinates … of all the plots of land where the relevant commodities and products were produced,” the “time range of production,” and “verifiable information that the relevant commodities and products are deforestation-free.” In other words, companies must prove that their supply chains are deforestation-free.
While the new regulation seeks to ensure that companies collect accurate traceability data on the geographic origins of commodities known to be part of their supply chains, it lacks the necessary specificity to prevent companies from merely identifying a range of possible origins instead of actual sources. This ambiguity jeopardizes the legislation’s potential.
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