# EU lawmakers back ban on goods linked to deforestation
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-04-19
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: EU Parliament Approves Landmark Deforestation Law
Meta Description: EU bans imports of commodities linked to global forest destruction, requires due diligence from companies. Law aims to eliminate deforestation in supply chains.
URL: https://financedigest.com/eu-lawmakers-back-ban-on-goods-linked-to-deforestationhtml

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By Kate Abnett

BRUSSELS (Reuters) -The European Parliament approved a landmark deforestation law on Wednesday to ban imports into the EU of coffee, beef, soy and other commodities if they are linked to the destruction of the world’s forests.

The law will require companies that sell goods into the European Union to produce a due diligence statement and “verifiable” information proving their goods were not grown on land deforested after 2020, or risk hefty fines.

The rules aim to eliminate deforestation from the [supply chains](https://www.financedigest.com/in-the-supply-chain-clean-data-is-the-fuel-of-the-future.html "In the supply chain, clean data is the fuel of the future") of a range of everyday items sold in Europe. It will apply to soy, beef, [palm oil](https://www.financedigest.com/watchdogs-new-chief-says-high-prices-can-support-greener-palm-oil.html "Watchdog’s new chief says high prices can support greener palm oil"), wood, cocoa, coffee, rubber, charcoal, and derived products including leather, chocolate and furniture.

Deforestation is responsible for about 10% of global greenhouse gas emissions that drive [climate change](https://www.financedigest.com/u-n-sounds-deafening-warning-on-climate-change.html "U.N. sounds ‘deafening’ warning on climate change"), and the landmark law aims to tackle the EU’s contribution to this.

[“European consumers](https://www.financedigest.com/european-airlines-see-travel-withstanding-consumer-squeeze-for-now.html "European airlines see travel withstanding consumer squeeze for now") can now rest assured that they will no longer be unwittingly complicit in deforestation,” said Parliament’s negotiator on the law, Christophe Hansen.

The law does not target any one country, but has faced pushback from some that it would affect.

Indonesia and Malaysia, the world’s largest palm oil exporters, have accused the EU of blocking [market access for their palm](https://www.financedigest.com/date-palm-market-detailed-survey-on-key-trends-leading-players-business-opportunities-2026.html "Date Palm Market – Detailed Survey On Key Trends, Leading Players & Business Opportunities 2026") oil. The EU is the world’s third-largest palm [oil importer](https://www.financedigest.com/indias-reliance-makes-rare-buy-of-russian-naphtha-ups-fuel-oil-imports.html "India’s Reliance makes rare buy of Russian naphtha, ups fuel oil imports").

Malaysia has said it could stop exporting [palm oil](https://www.financedigest.com/the-palm-oil-market-to-witness-calculated-innovation.html "The Palm Oil Market To Witness Calculated Innovation") to the EU in response to the law, while palm oil smallholders warn that they cannot comply with its requirement to prove where goods were produced, using geolocation data.

The EU Parliament approved a deal on the rules, which was agreed by EU negotiators [last year](https://www.financedigest.com/uk-new-car-sales-rise-in-january-full-year-sales-to-top-last-year-smmt.html "UK new car sales rise in January, full-year sales to top last year – SMMT").

Brazilian agribusiness group ABAG also bashed the move, [saying the South American country – one of the world’s](https://www.financedigest.com/world-says-goodbye-to-britains-queen-elizabeth-from-cafes-and-consulates.html "World says goodbye to Britain’s Queen Elizabeth from cafes and consulates") largest food suppliers, a major soy, coffee and beef producer – already regulates deforestation under its forest code, allowing some areas to be cleared.

“It was a unilateral move they took without listening to Brazil,” ABAG’s head Luiz Carlos Carvalho said in an interview, adding his association had been in touch with Brazil’s foreign relations ministry to look for ways to dispute the legislation.

The law needs formal [approval](https://www.financedigest.com/eu-commission-approves-delay-in-medical-devices-law-to-avert-shortages.html "EU commission approves delay in medical devices law to avert shortages") from EU countries – a process that typically waves through pre-agreed laws – before it can enter into force. Once that happens, large companies would have 18 months to comply, and smaller firms 24 months.

Companies that [fail to comply could face fines](https://www.financedigest.com/uk-to-fine-tech-companies-that-fail-to-remove-self-harm-material.html "UK to fine tech companies that fail to remove self-harm material") of up to 4% of a company’s turnover in an EU member state. EU [countries will carry out compliance checks to enforce the rules](https://www.financedigest.com/four-european-countries-call-for-special-treatment-of-defence-in-eu-debt-rules-document.html "Four European countries call for special treatment of defence in EU debt rules – document").

(Reporting by Kate Abnett; Additional reporting by Roberto Samora in Sao Paulo; Editing by Sudip Kar-Gupta, Louise Heavens, Philippa Fletcher and Jonathan Oatis)


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