Law that bars import of product linked to deforestation advances in the EU and may affect Brazil

The European Union agreed on Tuesday (6) to a new law to prevent companies from selling coffee, beef, soy and other commodities linked to deforestation worldwide, including in Brazil, to the EU market.

The law will require companies to submit a due diligence statement showing that their supply chains are not contributing to forest destruction before selling goods to the EU — or they could face hefty fines.

“I hope this groundbreaking regulation will boost the protection of forests around the world and inspire other countries,” said European Parliament Chief Negotiator Christophe Hansen.

Deforestation is one of the main sources of greenhouse gas emissions that drive climate change and will be in focus at a UN conference on biodiversity this week, where countries will seek a global agreement to protect the nature.

Negotiators from EU countries and the European Parliament closed the deal on the law on Tuesday.

It will apply to soybeans, beef, palm oil, timber, cocoa and coffee, and some derivative products including leather, chocolate and furniture. Rubber, coal and some palm oil derivatives were included at the request of EU parliamentarians.

Companies will need to show when and where the commodities were produced and “verifiable” information that they were not grown on land deforested after 2020.

Failure to comply can result in fines of up to 4% of a company’s turnover in an EU Member State.

Countries affected by the new rules, including Brazil, Indonesia and Colombia, say they are onerous and expensive. Supply certification is also difficult to monitor, especially as some chains can span multiple countries.

While activists hailed the law as historic, they also criticized the requirement that companies prove they respected indigenous peoples’ rights — but only if those rights are already legally protected in the producing country.

“The EU missed the chance to signal to the world that the most important solution to stop deforestation is to defend indigenous rights,” said Nicole Polsterer of the Fern group.

EU countries and the European Parliament now need to formally pass legislation. The law can take effect 20 days later, after which large companies have 18 months to comply and small companies 24 months.

The EU said it would work with affected countries to increase their ability to implement the rules.