Blockchain Technology to Meet EUDR Demands for Traceability
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We wrote previously that EU Deforestation Regulations and its enforcement measure in Corporate Due Diligence (CSDDD) will become law.
Palm oil producing countries, Malaysia and Indonesia, have continued to argue vociferously against what they see as a unilateral trade measure to protect the European Union’s oilseeds industries.
The EU Ambassador to Malaysia, made another press statement to assure Malaysian smallholders that the EUDR will not affect smallholders represented by FELDA.
“Palm oil produced by smallholders under the Federal Land Development Authority (Felda) will not be affected by the European Union Deforestation-free Regulation (EUDR), said European Union (EU) ambassador to Malaysia, Michalis Rokas.
The new regulation will not have an impact on the land project participants as Felda has not cleared any forest to open new plantations since 1990, he said.
"Since your (smallholders') plantations (under) Felda have had no deforestation since 1990, the rule does not apply. I want to make it clear the EUDR will only apply if the land is cleared from Jan 1, 2021," he said during a palm oil dialogue session jointly organised today (May 10) by the EU Mission to Malaysia and Foreign Correspondents Club Malaysia (FCCM) to address concerns on the regulation.
Malaysia’s Deputy Prime Minister Datuk Seri Fadillah Yusof who is also the Plantation and Commodities Minister responded to the Ambassador’s statement by saying that:
“We hope to receive a good explanation from them and obtain their commitment so that Malaysia will not be rated (seen) as a high-risk country. This should not happen, especially to smallholders,”
Aside from the issue of smallholders, European policy observers are starting to question the heavy hand of the EU in imposing the Deforestation Regulations.
The opinion below, published by NRC NL, recommended consultations instead of a “blunt axe” to force deforestation regulations onto producing countries.
“Would it not have been better to enter into a dialogue with exporting countries, so that something could have been changed in the entire production process? Proponents of previous agreements emphasize that even in countries that have not yet completed their implementation, progress has been made in tackling illegal deforestation. However, those results are too meager for a continent that wants to lead the way in combating climate change.
The new deforestation regulation is therefore actually a sign of weakness. The EU cannot move countries enough to tackle deforestation in general, so it focuses on its own production line. But to be a true green leader, the EU will have to talk to other countries. Because what does a pioneering role mean if no one follows you?”
Pieter Cleppe who wrote a piece for EURACTIV asked:
"Is the proposed EU ‘deforestation’ regulation really a win for the environment?
In the first place, as is often the case, it is not even clear whether the European Union has competence in this area, but protecting forests is something that is clearly valuable.
The question is whether the EU is opting for the right policy recipe, particularly because the way it is trying to protect precious nature threatens to disproportionally harm an industry that has already made great progress in reducing deforestation: South East Asia’s palm oil industry."
These are valid points that highlight the likelihood of EUDR’s failure to deliver its stated goals.
Palm Oil as a Punching Bag for EU Politicians
The projected failure of EUDR to protect forests unless producing countries are involved, will not stop the European Union from rubber stamping the legislations. There are two situations which will force the hand of legislators in Brussels to push it through.
For one, European farmers are up in arms over the Union’s green agenda.
As reported by The Guardian
"Until relatively recently, Dutch farming prowess was hailed as one of the wonders of the global economy. In 2017, a National Geographic article headlined “This tiny country feeds the world” encapsulated a sense of national pride at the Netherlands’ status as the second-biggest exporter of agricultural products by value behind the United States.
These days, Dutch farmers are in the headlines for less upbeat reasons. As the climate emergency and a related biodiversity crisis belatedly take centre stage in policymaking, the prime minister, Mark Rutte, has committed to halving the country’s overall nitrogen emissions by 2030. A large proportion of these are generated by the manure and urine produced by more than 100m cattle, pigs and chickens. To reach the target, and protect biodiversity in the polluted countryside, the government has announced plans to reduce livestock numbers by a third. Reluctant farmers have been warned they could be subject to compulsory buyouts."
The farmer’s protest resulted in a political setback for the ruling party “amidst widespread dissatisfaction with Rutte's government and anger among farmers at plans to rein in nitrate pollution.”
What happened in the Netherlands threatens to spread over Europe as farmers in other member states of the European Union fear the “anti-farming” policies from Brussels.
With their voters threatening to remove them from office, it is most likely that lawmakers in Brussels will make use of palm oil as a scapegoat, as EU elections loom ahead.
Turning Unilateral Measures into Multilateral Measures
In light of the domestic problems in EU where agriculture is concerned, palm oil producing countries which have complained about the unilateralism of deforestation regulations, would be well advised to turn EUDR into a multilateral measure by forcing their hands on the matter.
High level meetings are taking place in coming weeks with a delegation of ministers from Malaysia and Indonesia traveling to Brussels to confront the EUDR issue. An EU trade delegation is expected to travel to Indonesia to discuss trade negotiations for IEU-CEPA where palm oil is a sticky point.
These are perfect opportunities for palm oil producing countries to have their say in shaping EUDR. The thing is, the EU lawmakers have not made up their mind on what shape or form the deforestation regulations look like. Their only concern is that EU imports of palm oil will not come from areas deforested after 2020.
Meeting this requirement will be easy for Malaysia and Indonesia whose existing palm oil plantations are more than capable of supplying the EU with deforestation-free palm oil several times over.
Proving that Malaysian and Indonesian palm oil exports to the EU did not come from deforested lands after 2020, is an easy matter as well. Dibiz Global which uses blockchain technology to trace supplies back to the farm, is ready to help palm oil producers to meet the EUDR’s requirement for geolocation. It’s easy enough for Dibiz to plug in information from the Malaysian Sustainable Palm Oil and the Indonesian Sustainable Palm Oil schemes to verify the supply source.
In light of the absence from the EU for a more practical way to enforce EUDR, the word of national schemes for sustainable palm oil, supported by a platform for traceability, is the best solution for the EU. The only question that remains, is whether EU lawmakers will consider a collaborative effort towards reducing deforestation and accept this ASEAN solution towards meeting EUDR demands.
Published May 2023. CSPO Watch
Palm oil producing countries, Malaysia and Indonesia, have continued to argue vociferously against what they see as a unilateral trade measure to protect the European Union’s oilseeds industries.
The EU Ambassador to Malaysia, made another press statement to assure Malaysian smallholders that the EUDR will not affect smallholders represented by FELDA.
“Palm oil produced by smallholders under the Federal Land Development Authority (Felda) will not be affected by the European Union Deforestation-free Regulation (EUDR), said European Union (EU) ambassador to Malaysia, Michalis Rokas.
The new regulation will not have an impact on the land project participants as Felda has not cleared any forest to open new plantations since 1990, he said.
"Since your (smallholders') plantations (under) Felda have had no deforestation since 1990, the rule does not apply. I want to make it clear the EUDR will only apply if the land is cleared from Jan 1, 2021," he said during a palm oil dialogue session jointly organised today (May 10) by the EU Mission to Malaysia and Foreign Correspondents Club Malaysia (FCCM) to address concerns on the regulation.
Malaysia’s Deputy Prime Minister Datuk Seri Fadillah Yusof who is also the Plantation and Commodities Minister responded to the Ambassador’s statement by saying that:
“We hope to receive a good explanation from them and obtain their commitment so that Malaysia will not be rated (seen) as a high-risk country. This should not happen, especially to smallholders,”
Aside from the issue of smallholders, European policy observers are starting to question the heavy hand of the EU in imposing the Deforestation Regulations.
The opinion below, published by NRC NL, recommended consultations instead of a “blunt axe” to force deforestation regulations onto producing countries.
“Would it not have been better to enter into a dialogue with exporting countries, so that something could have been changed in the entire production process? Proponents of previous agreements emphasize that even in countries that have not yet completed their implementation, progress has been made in tackling illegal deforestation. However, those results are too meager for a continent that wants to lead the way in combating climate change.
The new deforestation regulation is therefore actually a sign of weakness. The EU cannot move countries enough to tackle deforestation in general, so it focuses on its own production line. But to be a true green leader, the EU will have to talk to other countries. Because what does a pioneering role mean if no one follows you?”
Pieter Cleppe who wrote a piece for EURACTIV asked:
"Is the proposed EU ‘deforestation’ regulation really a win for the environment?
In the first place, as is often the case, it is not even clear whether the European Union has competence in this area, but protecting forests is something that is clearly valuable.
The question is whether the EU is opting for the right policy recipe, particularly because the way it is trying to protect precious nature threatens to disproportionally harm an industry that has already made great progress in reducing deforestation: South East Asia’s palm oil industry."
These are valid points that highlight the likelihood of EUDR’s failure to deliver its stated goals.
Palm Oil as a Punching Bag for EU Politicians
The projected failure of EUDR to protect forests unless producing countries are involved, will not stop the European Union from rubber stamping the legislations. There are two situations which will force the hand of legislators in Brussels to push it through.
For one, European farmers are up in arms over the Union’s green agenda.
As reported by The Guardian
"Until relatively recently, Dutch farming prowess was hailed as one of the wonders of the global economy. In 2017, a National Geographic article headlined “This tiny country feeds the world” encapsulated a sense of national pride at the Netherlands’ status as the second-biggest exporter of agricultural products by value behind the United States.
These days, Dutch farmers are in the headlines for less upbeat reasons. As the climate emergency and a related biodiversity crisis belatedly take centre stage in policymaking, the prime minister, Mark Rutte, has committed to halving the country’s overall nitrogen emissions by 2030. A large proportion of these are generated by the manure and urine produced by more than 100m cattle, pigs and chickens. To reach the target, and protect biodiversity in the polluted countryside, the government has announced plans to reduce livestock numbers by a third. Reluctant farmers have been warned they could be subject to compulsory buyouts."
The farmer’s protest resulted in a political setback for the ruling party “amidst widespread dissatisfaction with Rutte's government and anger among farmers at plans to rein in nitrate pollution.”
What happened in the Netherlands threatens to spread over Europe as farmers in other member states of the European Union fear the “anti-farming” policies from Brussels.
With their voters threatening to remove them from office, it is most likely that lawmakers in Brussels will make use of palm oil as a scapegoat, as EU elections loom ahead.
Turning Unilateral Measures into Multilateral Measures
In light of the domestic problems in EU where agriculture is concerned, palm oil producing countries which have complained about the unilateralism of deforestation regulations, would be well advised to turn EUDR into a multilateral measure by forcing their hands on the matter.
High level meetings are taking place in coming weeks with a delegation of ministers from Malaysia and Indonesia traveling to Brussels to confront the EUDR issue. An EU trade delegation is expected to travel to Indonesia to discuss trade negotiations for IEU-CEPA where palm oil is a sticky point.
These are perfect opportunities for palm oil producing countries to have their say in shaping EUDR. The thing is, the EU lawmakers have not made up their mind on what shape or form the deforestation regulations look like. Their only concern is that EU imports of palm oil will not come from areas deforested after 2020.
Meeting this requirement will be easy for Malaysia and Indonesia whose existing palm oil plantations are more than capable of supplying the EU with deforestation-free palm oil several times over.
Proving that Malaysian and Indonesian palm oil exports to the EU did not come from deforested lands after 2020, is an easy matter as well. Dibiz Global which uses blockchain technology to trace supplies back to the farm, is ready to help palm oil producers to meet the EUDR’s requirement for geolocation. It’s easy enough for Dibiz to plug in information from the Malaysian Sustainable Palm Oil and the Indonesian Sustainable Palm Oil schemes to verify the supply source.
In light of the absence from the EU for a more practical way to enforce EUDR, the word of national schemes for sustainable palm oil, supported by a platform for traceability, is the best solution for the EU. The only question that remains, is whether EU lawmakers will consider a collaborative effort towards reducing deforestation and accept this ASEAN solution towards meeting EUDR demands.
Published May 2023. CSPO Watch
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