Source: European Parliament
The Commission Impact Assessment[1] underpinning the initial legislative proposal assessed the costs of compliance. These are significantly lower than the expected benefits.
The EU Deforestation Regulation (EUDR)[2] is expected to contribute to a minimum of 71 920 hectares of forest per year being less affected by EU-driven deforestation and forest degradation. This would mean a reduction of at least 31.9 million metric tons of carbon emitted to the atmosphere every year due to EU consumption.
The potential impact on the prices of final consumer goods, including food, is expected to be limited, based on the findings of the impact assessment, other reports on cost estimates of due diligence legislation, and the previous regulatory experience on wood[3].
The Impact Assessment also assessed the risk that producers may be tempted to separate their supply chains, selling deforestation-free products to the EU while continuing to sell non-deforestation-free products to other markets.
The benchmarking system provided in Article 29 of the EUDR is expected to create further incentives for producers to reduce deforestation and forest degradation and promote deforestation-free supply chains.
Additional measures that are being put in place by the EU are expected to help tackle this risk of leakage, including partnerships with producer countries combined with technical assistance.
Some industry sectors have shared evidence that EUDR deforestation-free requirements are being adopted by some companies for their global operations, not just for their EU sales.
- [1] https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en.
- [2] Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010, OJ L 150, 9.6.2023, p. 206-247.
- [3] Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market, OJ L 295, 12.11.2010, p. 23-34.