All you need to know about the EU Deforestation Regulation (EUDR) in questions from companies and answers from Milena Kazanowska-Kędzierska, who examines the state of Polish businesses’ preparation for the new regulations on production based on the use of cattle, cocoa, coffee, oil palm, rubber, soya and wood… That is, activities causing deforestation.
Deforestation – Polish and European companies face challenges
The business community agrees that this is one of the most demanding pieces of legislation to which they will have to adapt, and they expect it to be a long, challenging and intensive process. We want to make it easier by answering the most common questions, clarifying difficult issues, dispelling doubts and providing examples of successful implementation and best practice, so that Polish companies are ready to compete with the best in Europe and the world.
The EUDR distinguishes between two categories of entities subject to it: ‘operators’ and ‘traders’. What is the difference?
The main difference is that an ‘operator’ is responsible for the initial placing on the EU market or export of a product, whereas a ‘trader’ deals with the further making available of products which are already placed on the market.
Looking at this in more detail, the EUDR imposes new obligations on:
Operators – i.e. any natural or legal person who, in the course of a commercial activity (i.e. for the purpose of processing, for distribution to commercial or non-commercial consumers, or for use in their own business or that of a trader):
- Places relevant products on the market, makes relevant commodities or products available on the Union market for the first time, which means “the first transaction involving a product, subsequent transactions no longer being covered by the concept in question, so that placing on the market should be understood to mean the first introduction of goods to the market by the manufacturer or importer”, or
- Exports relevant products, i.e. takes them out of the EU customs territory (in accordance with Regulation 952/2013)
Traders – meaning any person in the supply chain other than an operator, who, in the course of a commercial activity:
- makes relevant products available on the market, which means any supply of a relevant product for distribution, consumption or use on the Union market in the course of a commercial activity, whether in return for payment or free of charge
It should be noted that where the relevant products are placed on the market by a non-EU natural or legal person, the first natural or legal person established in the EU who makes these relevant products available on the EU market is considered to be the OPERATOR.
Which products are covered by the EUDR? In other words, transactions in which products will fall under the EUDR?
Milena Kazanowska-Kędzierska:
These are the relevant commodities and products related to deforestation and forest degradation as listed in Annex 1 of the EUDR, which are:
- Placed on the EU market
- Exported from the Union
- Made available on the EU market
It is worth noting that this list may be expanded in the future to include other products if they are deemed to cause deforestation.
Relevant commodities include cattle, cocoa, coffee, oil palm, soy, rubber and timber, while relevant products are those that:
- Contain relevant commodities
- Have been fed with relevant commodities
- Have been made using relevant commodities
A list of such commodities can be found here.
Example:
Company A produces chocolates in Poland, which it then sells (places on the market), inter alia, to Company B, which sells them on the EU market in the course of its commercial activity.
Company A – OPERATOR
Company B – TRADER
Chocolates – RELEVANT PRODUCT [1806] Chocolate and other food preparations containing cocoa
When will the EUDR become applicable?
The Regulation entered into force on 29 June 2023, but will only be applicable from 30 December 2024.
It should be noted that on 2 October, the European Commission made a proposal to extend this deadline, but no binding decision has yet been taken.
The Commission proposes to give concerned parties additional time to prepare. If approved by the European Parliament and the Council, it would make the law applicable on 30 December 2025 for large companies and 30 June 2026 for micro- and small enterprises.
This means that companies should prepare for the implementation of the due diligence regime, taking into account the current deadlines.
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