According to the Food and Agriculture Organization of the United Nations, 90% of global deforestation is caused by the expansion of agricultural land, which leads to the deforestation associated with various raw materials and the products made from them. The European Commission estimates that the European Union is the largest global importer of such products, meaning that by importing them, the EU indirectly contributes to worldwide deforestation.
To reduce the EU’s impact on deforestation, the European Union adopted the Anti-Deforestation Regulation (Regulation (EU) No 2023/1115 of the European Parliament and of the Council). This regulation introduces strict requirements regarding the trade of products that have a significant impact on deforestation.
The EUDR will affect many companies and applies to different groups of products sold. It specifically targets companies dealing with the commodities listed in Annex I of the Regulation, which include products derived from wood, soy, coffee, cocoa, olive oil, cattle, and rubber. Before selling these products, companies must ensure they are free from deforestation, that they have been produced legally, and they must submit a notification to this effect in an information system set up by the European Commission for this purpose.
In the notification, companies must not only confirm that the products comply with EUDR but also provide documentation or other reliable evidence to prove it. The notification will also need to include specific geographical coordinates of the location where the raw materials were sourced, to verify that no deforestation has occurred. Implementing this requirement poses significant challenges due to the diverse range of products and the complexity of supply chains.
With the Regulation set to take effect at the beginning of next year, time is running out for companies to prepare for its proper implementation, and several of its requirements have raised concerns.
Many businesses, EU Member States, and countries worldwide have expressed doubts about their ability to comply with these strict requirements within the given timeframe. They have called on the European Commission to delay the implementation of the Regulation. However, the European Commission has no plans to postpone the Regulation and does not intend to introduce any amendments.
One of the most pressing concerns regarding the timely implementation of the EUDR is the information system being developed by the European Commission. This system is intended to help monitor compliance with the Regulation. The European Commission plans to present this system to the competent authorities of EU Member States in late September and will provide remote training for all system users in October. The Ministry of the Environment will inform Lithuanian companies about the schedule for this training.
However, the system is not expected to be fully operational until December, leaving very little time to resolve any potential issues and train users effectively.
During the webinar, Ministry of the Environment specialists assured companies that they will provide written answers to their questions and offer guidance in case of any uncertainties.
