PALMOILMAGAZINE, JAKARTA – Over the past decade, many countries have taken steps to reduce deforestation, such as implementing moratoriums and enhancing supply chain transparency to support forest conservation. Despite these efforts, the European Union (EU) has reported ongoing forest degradation and deforestation, which continues to contribute more than 10% of global greenhouse gas emissions.
In response, the EU Commission introduced the European Union Deforestation Regulation (EUDR) at the end of 2022. The regulation is set to be fully implemented by early 2025. However, it will not take effect immediately for business owners (micro, small, and medium-sized businesses) in the EU. The EUDR will become effective in June 2024, six months later than in other countries.
The regulation would cover seven high – risky commodities, they are, wood, soybean, palm oil, coffee, chocolate, beef, and rubber, and the derivative products, such as, chocolate, feather, and paper. Every company in these sectors is banned to put their products to EU unless if they could prove that theirs had nothing to do with deforestation.
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EUDR does not directly deliver impact for the smallholders because in general they do not directly trade their products to EU without having partners with big companies. But the impacts (for smallholders) would be existing. When EU implements/restricts the companies/industries, the smallholders would get the impacts because their products (fresh fruit bunch/FFB) would not be accepted in EU.
In this country, EUDR terms and condition are used by palm oil companies to make smallholders’ FFB namely the independent ones, cheaper because they have nothing to do with the mill directly. This happens because their products are not traceable. That is why the clear regulation would be very significant to regulate palm oil plantation governance and reinforce palm oil commerce. The regulation would be about to confirm smallholders’ traceability and inclusivity in EU supply chain. (P2)
