EU Targets Key Commodities in New Rules to Prevent Deforestation

(Bloomberg) -- The European Commission will propose new rules Wednesday for companies selling six major commodities in Europe aimed at ensuring their goods aren’t contributing to deforestation and are legal in their country of origin, according to a document seen by Bloomberg.

The rules would apply to soy, beef, palm oil, wood, cocoa and coffee, as well as some derived products such as chocolate, leather and furniture.

Under the new rules, operators would have to collect the geographic coordinates of where the commodities originated, the document says. As part of the plans, the EU will operate a benchmarking system to categorize countries according to their level of risk for deforestation and that information will be used to determine the obligations on companies and member states. 

For example, due diligence will be simplified for goods from lower risk areas while more enhanced demands will be placed on products coming from higher risk areas.

The aim of the new rules is to reduce the EU’s impact on global deforestation and forest degradation. The EU hopes that this will translate into a reduction of at least 31.9 million metric tons of carbon emissions to the atmosphere every year, which could be translated into economic savings of at least 3.2 billion euros ($3.6 billion) annually, according to the document.

The document says that “deforestation-free” is defined as the condition of the goods produced on land that has not been subject to deforestation or forest degradation after December 31, 2020.

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