The new EU Deforestation Regulation mandates exporters to provide detailed documentation and geolocation data to prove wood products are deforestation-free

New regulations governing wood products imports into the European Union could disrupt or severely impede the region’s trade of softwood and hardwood lumber and panels with foreign suppliers.

The EU Deforestation Regulation (EUDR) was enacted in December 2022 and implemented in June 2023. Enforcement is scheduled to begin December 30, 2024. The laws apply to European Union imports of wood and wood products, cattle, cocoa, coffee, palm oil, rubber, and soy.

Lumber and panel exporters will be required to prove that products shipped into the European Union were produced from logs that were harvested from land that has not been subject to deforestation. The regulations define deforestation and forest degradation as a conversion of a forest to other agricultural uses. Forest degradation is further defined as a structural alteration of forest cover and a conversion from a naturally regenerating forest to a planted forest.

Exporters also must provide documentation that all products were produced in compliance with the supplying country’s current laws regarding land use, environmental protection, labor rights, and other factors. Additionally, shippers will be required to provide due diligence statements that provide the precise location of the forests where the wood was harvested. The geolocation points must be defined by latitude and longitude coordinates with at least six decimal places. The tree species and date or time range of harvest will also be required.

Exports risk storage charges
EU customs will not release lumber or panel imports into the market if the required documentation is missing. Exporters who ship loads lacking the required information could risk storage charges, have the products returned, and possibly face a variety of other sanctions.

“It is therefore important that you start gathering the necessary information now,” a memo from the European Timber Trade Federation sent to many exporters last June advised. “Without this information you will no longer be able to export wood products to the EU (after December 30).”

Various trade agencies in the US and Canada, including the Southern Forest Products Association, the American Hardwood Export Council, USDA, Natural Resources Canada, and the Quebec Wood Export Bureau, are negotiating on behalf of North American exporters shipping to the EU.

A sales manager for a large Western Canadian producer noted in mid-July that most species the company exports to Europe would not meet the regulation as currently written. Cedar and Hemlock clears and other species, especially ones that rely on old-growth forests, would be banned from shipment to the EU.

Southern Pine exporters have expressed concern that the new regulations would eliminate all SYP export suppliers who buy “gate wood” or logs from small acreage stands. One veteran SYP exporter predicted that the majority of exporters to the EU will stop serving that market and concentrate on the larger markets in the Middle East, North Africa, and Asia if the regulations remain unchanged.

In May, US trade officials sent a letter to the EU Commission urging a postponement of the EUDR until “substantial challenges” are addressed. The letter noted that US exporters are struggling to be ready for the new regulations on time.
 
Source: fastmarkets.com