The EU Deforestation Regulation (EUDR) will impact all businesses trading in timber. With it soon entering force, Maggie FitzHerbert, Senior Responsible Sourcing Manager at the Soil Association, offers some keys way to prepare.
If you are trading in timber and wood-based products, now is the time to become better prepared for its introduction. Published in June 2023 with an 18-month implementation period, the EUDR and its full requirements will come into force on 30 December this year, when businesses within the EU or supplying into the EU or Northern Ireland, must ensure the timber and wood-based products they trade in are legally and sustainably sourced and are verifiably deforestation and degradation-free.
For those in the timber industry, this means confirming that their products – sawn timber, wood-based materials, paper and furniture – do not originate from land deforested or degraded after 31 December 2020, and that they comply with the environmental and social laws of the specific country of production. This will include pursuing a thorough due diligence process tracking the entire supply chain and providing data that demonstrates compliance with the EUDR.
The level of due diligence required in a country will depend on the risk category (‘low’, ‘standard’ or ‘high’) assigned to it by the EU. Currently, all countries, including the UK are categorised as ‘Standard’ risk so a full due diligence system (DDS) is required. Penalty fees for non-compliance will be severe and include fines of 4% based on annual turnover, with products potentially seized and prohibited from entering the EU market.
Why does this affect UK businesses?
UK businesses with operations in the EU, or customers within the EU, need to have a comprehensive understanding of their supply chains. As the 30 December 2024 implementation date approaches, businesses must take proactive steps to ensure compliance by implementing robust due diligence systems, engaging with stakeholders, training staff and staying informed about updates or changes to the EUDR and related regulations.
Within the EUDR there are also new definitions of timber ‘operators’ and ‘traders’ so compliance may require significant adjustments to existing supply chain management practices with additional costs related to verification and documentation. New demands on UK companies will include them having to share geolocation data and harvest dates of their wood-based products to allow EU customers to comply with the EUDR, so UK companies will receive data requests on their product origins. Within Northern Ireland, the EUDR may be applied under the NI Protocol, but Defra and the European Commission have not made a statement about its application yet.
What should UK companies be doing now?
Everyone trading and processing timber must understand their exposure to the EUDR. This means knowing whether products you trade are in scope of the EUDR and could end up on the EU market further down the supply chain. You should review and revise your company procedures and policies to make sure that your operational activities, risk assessments, due diligence and traceability systems are up to date. This may require educating, training and raising awareness throughout your organisation and employing additional resources if needed.
As things progress throughout 2024, it is important that you familiarise yourself with the EUDR and plan how your business will implement changes. It is essential to engage your suppliers to map your supply chain to gather information such as harvest date and geolocation as it is needed by companies trading in the EU.
Certification & EUDR Alignment
The EUDR is an evolving process with complex implications. Both FSC and PEFC offer pathways to EUDR alignment.
In July, FSC published the FSC Regulatory Module, an updated FSC Risk Assessment Framework, and various Advice Notes to ‘operationalise’ these changes. These changes are immediately effective for users of the FSC Regulatory Module.
The FSC Regulatory Module and FSC Risk Assessment Framework comprise FSC Aligned Certification for EUDR, along with system-wide updates to align with the intention of the Policy to Address Conversion. The Risk Assessment Framework and other system-wide changes are also applicable for Certificate Holders not affected by EUDR.
Following its approval by the PEFC General Assembly, PEFC ST 2002-1:2024, Requirements for the Implementation of PEFC EUDR Due Diligence System (PEFC EUDR DDS), was also published in July. This module standard will support organisations in demonstrating compliance with the EUDR.
Certification schemes and their inherent Chain of Custody help meet due diligence requirements, but it must be remembered that these do not give companies exemption from following their own specific EUDR responsibilities. While EUDR compliance may present technical challenges, the long-term benefits are a better protected, healthy forest resource and confidence that the timber in the supply chain is legally and responsibly sourced.
More at: www.soilassociation.org/certification/forestry/responsible-sourcing/
https://fsc.org/en/eudr-regulation-on-deforestation-free-products
www.pefc.org/eudr
Source: Timber Trader UK Issue 25
