Will the EU Accept National Certification Programs for EUDR Purposes?
Here’s why the European Union should accept national certification programs for EUDR purposes as exemplified by the palm oil industry
- The European Union’s Deforestation Regulations is set to punish the most vulnerable of all stakeholders in the global commodities supply chains.
- The demands of the EUDR for documentation and traceability to prove that the commodity does not drive deforestation, will affect millions of smallholders in African and ASEAN countries whose ability to read or write, is rudimentary at best.
- As the deadline looms for the implementation of EUDR for imports of affected commodities into the European Union, it is becoming alarmingly clear, that smallholders for coffee, cocoa, rubber and palm oil, may be punished for their lack of education and access to modern technology.
Multinational companies like Unilever speak in glowing terms of how the company is tackling global deforestation with technology from satellites to old mobile phones to
"listen for the sounds of logging: trucks and chainsaws. The phones, already equipped with microphones and GPS, and upgraded with modern software and solar panels, are attached to trees to form a network of listening stations across the forest. The phone sends a short recording of suspicious sounds to parties who can verify and check out the location and take action—or alert authorities."
"listen for the sounds of logging: trucks and chainsaws. The phones, already equipped with microphones and GPS, and upgraded with modern software and solar panels, are attached to trees to form a network of listening stations across the forest. The phone sends a short recording of suspicious sounds to parties who can verify and check out the location and take action—or alert authorities."
As impressive as modern technology is in detecting deforestation, the question that has to be asked of Unilever is, what happens if the deforestation is caused by smallholders looking to improve their livelihoods but cannot meet the tech requirements?
EUDR to Punish Poor Smallholders
According to Solidaridad Network, an European group that works to improve sustainability in tropical commodities:
The new Coffee Barometer 2023, an in-depth report on the state of sustainability in the coffee sector, reveals some worrying new findings. Despite the passage of anti-deforestation laws by the EU, the clearing of forests is set to continue apace as coffee-farming families struggle with securing better livelihoods.
As for cocoa and the deforestation associated with smallholders, the German Institute of Development and Sustainability warned:
The real impact on the EU's “partners” in the Global South is not only causing concern in exporting countries, but there are even risk from unintended negative impacts which have to be weighed against the intended positive ones, as the example of cocoa in Côte d'Ivoire shows.
In Côte d'Ivoire, cocoa farming is a major economic and social sector. This industry supports almost one million cocoa farmers and, together with families and other supply chain actors, more than 8 million people. With a production of about 2.4 million tons in 2022, it accounts for 15% of Côte d’Ivoire’s gross domestic product and 40% of its exports. The country produces 40% of the world's cocoa, and exports 59% of its output to the EU.
At the same time, Côte d’Ivoire’s forests continue to experience a rapid decline in the area. 9 million hectares have been lost since 1960 and forests cover currently 9% of the country’s territory. Agriculture has caused 62% of deforestation, led by cocoa with 38%.
As for rubber, this Carbon Brief report based on findings published in Nature shows the same involvement of deforestation by smallholders.
It finds that more than 4m hectares of tropical forests have been lost to rubber plantations in south-east Asia over the last three decades – at least two-to-three times more than previously thought. More than 1m ha of plantations have been established in key biodiversity areas.
The greatest forest losses occurred in Indonesia, Thailand and Malaysia, the research says. In Cambodia, more than 40% of rubber plantations were associated with deforestation, of which 19% was in key biodiversity areas.
The study has important implications for both domestic and global policy, one author tells Carbon Brief, with rubber causing “more deforestation than is assumed in data that underpinned policy in both the EU and the G7”.
However, they caution that rubber – a substantial and sustainable source of income for smallholder farmers with significant climate benefits – should not be “demonised” because of deforestation data.
Challenges to the EU’s Green Deals
Meanwhile, Corporate EU is Not Ready for EUDR. FEDIOL, the EU vegetable oil and proteinmeal industry association which represents the interests of the European oilseed crushers, vegetable oil refiners and bottlers warned that:
Unless there is a speeding up of needed clarification, guidance & support for their preparations, supply chain players will not be ready.
FEDIOL’s concerns may be unwarranted in terms of EUDR simply because there are bigger factors in play that could see the EUDR disappear into the night.
For one, the European Union is desperate to sign trade deals but is finding out the hard way, that the EU is not as important of a market as the Union thinks it is.
The failure of the EU-Australia free trade talks was summarized by DW as:
A deal with the EU would have been a bonus, but is not existential for its [Australia's farming sector's ] global competitiveness," he said. Unlike EU farmers their Australian counterparts are not pampered by heavy state subsidies. They are much more competitive on international markets as big as China.
It is not a coincidence that at the same time as Australia rejected the EU’s free trade proposals, Nikkei Asia reported that Chinese President Xi Jinping and Australian Prime Minister Anthony Albanese on Monday agreed to improve trade relations after a period of heightened bilateral tensions as both countries seek a thaw for economic and political reasons.
Further threatening the EU’s green ambitions is India’s opposition to the EU’s CBAM.
India, backed by several developing nations, opposed the introduction of the issue of environment sustainability and trade for discussion, at the recent senior officials meeting at the WTO, on the grounds that the matter was “too premature” to be taken up by Ministers at the 13th WTO Ministerial Conference in February 2024. It also expressed its concerns on such issues being used as a barrier to trade.
India’s opposition to CBAM carries implications to the EU’s anti-palm oil position, which banned palm oil biofuels for use in the EU’s renewable energy program. Palm oil producing countries Indonesia and Malaysia have filed their complaints against the EU at the WTO based on similar charges.
National Certification in a Meeting of Minds
Both Indonesia and Malaysia are confident that their arguments, presented at the WTO against the EU’s policies on biofuels, will win the cases.
The EUDR, with its focus on deforestation, not an outright ban on palm oil usage, has been met with a conciliatory approach by Indonesia and Malaysia.
Indonesia, which faces the most accusations of deforestation for palm oil, has been open about the problems it faces with illegal palm oil plantations.
To tackle this problem, the Minister of Environment and Forestry, Siti Nurbaya, promised to disclose data on illegal plantations and the palm oil management results conducted by the Palm Oil Task Force established by the central government. Siti also asserted that there will be no amnesty for illegal palm oil plantations, as the efforts taken are in accordance with the applicable policies.
The government has already identified 200,000 hectares of illegal plantations to be converted back into forests as part of the government's efforts to mitigate climate change.
Government led initiatives like these and others, is what supports Indonesia’s claims, that its palm oil industry, has not neglected sustainability aspects.
Malaysia has taken things a few steps further to meet the EUDR demands.
These national commitments to producing palm oil sustainably, will have a greater impact on reducing deforestation than an Eurocentric trade policy.
Prime Minister Datuk Seri Anwar Ibrahim has emphasized the aggressive measures undertaken by palm oil producing countries in Malaysia, Indonesia, Thailand and Colombia to comply with the EUDR.
Anwar also reiterated that the EU should focus on the current efforts taken by the producing countries instead of dwelling on the historical deforestation attributed to palm oil industries.
A key development by the Malaysian government to comply with EUDR, is the Sawit Intelligent Management System (SIMS) which is designed to facilitate transactional data management along the palm oil supply chain. The estimated 500,000 smallholders in Malaysia is expected to be connected to a platform that will trace transactions to help smallholders to comply with the criteria and traceability requirements for sustainability certification.
The Sawit Intelligent Management System will be critical in addressing the inclusion of Malaysian smallholders for the European market. In essence, Malaysia is paying to ensure the inclusion of its smallholders where EU officials have brushed off financial responsibility for costs in complying with EUDR.
A meeting of minds is possible according to this EURACTIV report with both sides showing willingness to help producers implement the EU’s anti-deforestation law.
Unless the EU thinks it can do a better job of managing forests in palm oil producing countries, the efforts of tropical countries that supply the EU market must be accepted in the implementation of EUDR. At risk is a further deterioration of the EU’s influence on palm oil producing countries as key palm oil companies like Sime Darby, shift their focus to India and China markets.
Published November 2023 CSPO Watch
EUDR to Punish Poor Smallholders
According to Solidaridad Network, an European group that works to improve sustainability in tropical commodities:
The new Coffee Barometer 2023, an in-depth report on the state of sustainability in the coffee sector, reveals some worrying new findings. Despite the passage of anti-deforestation laws by the EU, the clearing of forests is set to continue apace as coffee-farming families struggle with securing better livelihoods.
As for cocoa and the deforestation associated with smallholders, the German Institute of Development and Sustainability warned:
The real impact on the EU's “partners” in the Global South is not only causing concern in exporting countries, but there are even risk from unintended negative impacts which have to be weighed against the intended positive ones, as the example of cocoa in Côte d'Ivoire shows.
In Côte d'Ivoire, cocoa farming is a major economic and social sector. This industry supports almost one million cocoa farmers and, together with families and other supply chain actors, more than 8 million people. With a production of about 2.4 million tons in 2022, it accounts for 15% of Côte d’Ivoire’s gross domestic product and 40% of its exports. The country produces 40% of the world's cocoa, and exports 59% of its output to the EU.
At the same time, Côte d’Ivoire’s forests continue to experience a rapid decline in the area. 9 million hectares have been lost since 1960 and forests cover currently 9% of the country’s territory. Agriculture has caused 62% of deforestation, led by cocoa with 38%.
As for rubber, this Carbon Brief report based on findings published in Nature shows the same involvement of deforestation by smallholders.
It finds that more than 4m hectares of tropical forests have been lost to rubber plantations in south-east Asia over the last three decades – at least two-to-three times more than previously thought. More than 1m ha of plantations have been established in key biodiversity areas.
The greatest forest losses occurred in Indonesia, Thailand and Malaysia, the research says. In Cambodia, more than 40% of rubber plantations were associated with deforestation, of which 19% was in key biodiversity areas.
The study has important implications for both domestic and global policy, one author tells Carbon Brief, with rubber causing “more deforestation than is assumed in data that underpinned policy in both the EU and the G7”.
However, they caution that rubber – a substantial and sustainable source of income for smallholder farmers with significant climate benefits – should not be “demonised” because of deforestation data.
Challenges to the EU’s Green Deals
Meanwhile, Corporate EU is Not Ready for EUDR. FEDIOL, the EU vegetable oil and proteinmeal industry association which represents the interests of the European oilseed crushers, vegetable oil refiners and bottlers warned that:
Unless there is a speeding up of needed clarification, guidance & support for their preparations, supply chain players will not be ready.
FEDIOL’s concerns may be unwarranted in terms of EUDR simply because there are bigger factors in play that could see the EUDR disappear into the night.
For one, the European Union is desperate to sign trade deals but is finding out the hard way, that the EU is not as important of a market as the Union thinks it is.
The failure of the EU-Australia free trade talks was summarized by DW as:
A deal with the EU would have been a bonus, but is not existential for its [Australia's farming sector's ] global competitiveness," he said. Unlike EU farmers their Australian counterparts are not pampered by heavy state subsidies. They are much more competitive on international markets as big as China.
It is not a coincidence that at the same time as Australia rejected the EU’s free trade proposals, Nikkei Asia reported that Chinese President Xi Jinping and Australian Prime Minister Anthony Albanese on Monday agreed to improve trade relations after a period of heightened bilateral tensions as both countries seek a thaw for economic and political reasons.
Further threatening the EU’s green ambitions is India’s opposition to the EU’s CBAM.
India, backed by several developing nations, opposed the introduction of the issue of environment sustainability and trade for discussion, at the recent senior officials meeting at the WTO, on the grounds that the matter was “too premature” to be taken up by Ministers at the 13th WTO Ministerial Conference in February 2024. It also expressed its concerns on such issues being used as a barrier to trade.
India’s opposition to CBAM carries implications to the EU’s anti-palm oil position, which banned palm oil biofuels for use in the EU’s renewable energy program. Palm oil producing countries Indonesia and Malaysia have filed their complaints against the EU at the WTO based on similar charges.
National Certification in a Meeting of Minds
Both Indonesia and Malaysia are confident that their arguments, presented at the WTO against the EU’s policies on biofuels, will win the cases.
The EUDR, with its focus on deforestation, not an outright ban on palm oil usage, has been met with a conciliatory approach by Indonesia and Malaysia.
Indonesia, which faces the most accusations of deforestation for palm oil, has been open about the problems it faces with illegal palm oil plantations.
To tackle this problem, the Minister of Environment and Forestry, Siti Nurbaya, promised to disclose data on illegal plantations and the palm oil management results conducted by the Palm Oil Task Force established by the central government. Siti also asserted that there will be no amnesty for illegal palm oil plantations, as the efforts taken are in accordance with the applicable policies.
The government has already identified 200,000 hectares of illegal plantations to be converted back into forests as part of the government's efforts to mitigate climate change.
Government led initiatives like these and others, is what supports Indonesia’s claims, that its palm oil industry, has not neglected sustainability aspects.
Malaysia has taken things a few steps further to meet the EUDR demands.
These national commitments to producing palm oil sustainably, will have a greater impact on reducing deforestation than an Eurocentric trade policy.
Prime Minister Datuk Seri Anwar Ibrahim has emphasized the aggressive measures undertaken by palm oil producing countries in Malaysia, Indonesia, Thailand and Colombia to comply with the EUDR.
Anwar also reiterated that the EU should focus on the current efforts taken by the producing countries instead of dwelling on the historical deforestation attributed to palm oil industries.
A key development by the Malaysian government to comply with EUDR, is the Sawit Intelligent Management System (SIMS) which is designed to facilitate transactional data management along the palm oil supply chain. The estimated 500,000 smallholders in Malaysia is expected to be connected to a platform that will trace transactions to help smallholders to comply with the criteria and traceability requirements for sustainability certification.
The Sawit Intelligent Management System will be critical in addressing the inclusion of Malaysian smallholders for the European market. In essence, Malaysia is paying to ensure the inclusion of its smallholders where EU officials have brushed off financial responsibility for costs in complying with EUDR.
A meeting of minds is possible according to this EURACTIV report with both sides showing willingness to help producers implement the EU’s anti-deforestation law.
Unless the EU thinks it can do a better job of managing forests in palm oil producing countries, the efforts of tropical countries that supply the EU market must be accepted in the implementation of EUDR. At risk is a further deterioration of the EU’s influence on palm oil producing countries as key palm oil companies like Sime Darby, shift their focus to India and China markets.
Published November 2023 CSPO Watch
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