Officially coming into force in June 2023, the European Union Regulation on Deforestation-Free Products (EUDR) is one of the main instruments used by the European Union (EU) to combat the impacts linked to the nature of its agricultural imports. Part of the EU’s Green Deal initiative, the EUDR aims to combat deforestation and nature degradation involved in the value chains of products entering the European common market. Specifically, the measure targets the cocoa, coffee, soy, palm oil, timber, rubber and livestock value chains due to their impacts on critically endangered ecosystems across the world. Indeed, soy and livestock value chains have been identified as one of the main drivers of deforestation in the Amazon, while palm oil extraction is irrevocably linked to land degradation in peatlands Indonesian and Malaysian. In this context, the EU Deforestation Regulation is now highly regarded by environmentalists and environment-focused civil society organizations as an important step in the right direction. By banning these products from entering the European raw materials market, the EU hopes to reduce its deforestation footprint.
While the EUDR has been greeted with overwhelming optimism by some, it has raised concerns among others. By targeting products linked to deforestation in ecosystems such as peatlands in Malaysia and Indonesia, the Amazon rainforest in Brazil and the Gran Chaco plain in Argentina and Paraguay, the measure has sparked concern among farmers and officials governments of these countries. Criticisms of this measure range from allegations of simple economic protectionism, favoring European producers over foreign producers, to denunciation as a form of green colonialism.
Essentially, critics labeling the measure green colonialism refer to the perceived imposition of Western environmental standards and policies on the Global South, often without adequate consideration of local contexts or consultation with affected communities. After its entry into force on June 29, 2023, the EUDR was harshly criticized by representatives of so-called “high risk of deforestation” countries, such as Brazil, Malaysia, Indonesia and Argentina. A open letter addressed to EU officials, signed by 17 producing countries, including those mentioned previously, highlighted multiple concerns regarding this policy. Among these, the letter urges EU leaders to “intensify their engagement with producing countries in formulating clear and detailed implementing acts and guidelines for the EUDR, including differentiated regimes compliance and due diligence for raw materials and smallholder products in producing countries.
Furthermore, in March this year, the World Trade Organization (WTO) spoke out against the EU following a dispute raised by Malaysia over restrictions on imports of palm oil from degraded peatlands in Malaysia. The central issue revolved around the EU’s application of a maximum 7% share of biofuels in its energy mix and high-risk caps on certain biofuels such as palm oil. The WTO decision highlighted the EU’s failure to manage high-risk caps, citing delays in reviewing data and inconsistencies regarding fair treatment between nations as main concerns.
That said, to the great dismay of producing countries, the European regulation on deforestation remained in force. For countries like Indonesia or Malaysia, where agriculture represents 12% and 8% of their overall GDP respectively, this is a major source of concern. In 2022, the two countries exported a total of 2.5 million tonnes of palm oil to destinations within the EU, making the latter a major trading partner to Malaysian and Indonesian producers. According to an article published by the Indonesian Center for Parliamentary Analysis, the implementation of EUDR is expected to result in an annual revenue loss of $5.15 billion for Indonesia alone. As such, although aimed at protecting critically endangered ecosystems, the measure is expected to have a negative impact on revenue opportunities for agricultural exporting countries.
The countries that will be most affected by the EUDR are the countries of the South which rely heavily on agricultural exports. As a major trading partner for a number of these countries, the EUDR, while a historic decision for the protection of global ecosystems, also risks restricting trade opportunities for low-income countries . This has sparked outbursts from country representatives who believe the EU aims to dictate the environmental and economic policies of their respective governments. Brazilian Minister of Agriculture, Carlos Fávaro, expressed his dissatisfaction with this measure, describing it as an affront and a transgression of the country’s sovereignty. This measure has been called an example of green colonialism. The question therefore remains whether this measure is an appropriate response to land degradation in agricultural value chains, or whether it is a protectionist measure favoring European farmers over those in Southern countries.
Ultimately, finding a balance between environmental conservation and economic development remains a complex and ongoing challenge. The EU deforestation regulation represents a bold attempt to address these issues, but its success will depend on meaningful collaboration and dialogue between all stakeholders, including producing countries, international organizations and civil society.
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