# EU seeks deal on law preventing import of deforestation-linked goods
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-05
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: EU Aims to Tackle Deforestation with New Law Negotiations
Meta Description: The European Union is set to pass a law to prevent companies from selling products linked to deforestation, aiming to curb global emissions and strengthen its
URL: https://financedigest.com/eu-seeks-deal-on-law-preventing-import-of-deforestation-linked-goodshtml

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By Kate Abnett

BRUSSELS (Reuters) – The European Union will attempt to clinch a deal on Monday evening on a law to prevent companies from selling into the EU market soy, beef, coffee and other commodities linked to deforestation around the world.

Negotiators from EU countries and the European Parliament hope to finish the new due diligence rules, which would require companies to prove their supply chains are not contributing to the destruction of forests – or face fines.

The EU is taking responsibility for its own consumption patterns,” EU environment commissioner Virginijus Sinkevicius told Reuters, adding that the legislation would be [“transformative” in helping to curb global](https://www.financedigest.com/sql-server-transformation-market-advanced-research-growth-opportunities-in-global-industry-by-2029fmi.html "SQL Server Transformation Market advanced Research & Growth Opportunities in Global Industry by 2029|FMI") deforestation.

The European Union is responsible for around 10% of this [global deforestation via our consumption of certain products,” said Parliament’s lead](https://www.financedigest.com/cone-crusher-markets-advanced-research-growth-opportunities-in-global-industry-by-2030-edited-by-leading-research-firm.html "Cone Crusher Market’s advanced Research & Growth Opportunities in Global Industry by 2030 Edited by Leading Research Firm") negotiator Christophe Hansen.

Deforestation is a major source of greenhouse gas emissions that drive [climate change](https://www.financedigest.com/exclusive-world-bank-seeks-more-funds-to-address-climate-change-other-crises-document.html "Exclusive-World Bank seeks more funds to address climate change, other crises -document"). The EU is [hoping the law will strengthen its position](https://www.financedigest.com/uk-retailers-turn-positive-on-sales-hopes-after-bleak-winter.html "UK retailers turn positive on sales hopes after bleak winter") at the U.N.’s COP15 conference this week, where nearly 200 countries will [seek a global deal](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") to protect the natural world.

The proposed law would 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 and coffee, and some derived products including leather, chocolate and furniture. EU lawmakers want to add rubber and maize.

The European Commission, which drafts EU laws, proposed that 12 months after the law enters into force, larger companies that [place commodities on the EU market](https://www.financedigest.com/concrete-placing-booms-market-notable-developments-geographical-outlook.html "Concrete Placing Booms Market: Notable Developments & Geographical Outlook") would need to show they were not grown on land deforested after 2020. Smaller [firms must](https://www.financedigest.com/finance-firms-must-ensure-they-fix-data-fundamentals.html "Finance firms must ensure they fix data fundamentals") comply after 24 months.

[Companies would need to produce a due diligence statement showing when and where the commodities](https://www.financedigest.com/invest-in-cryptocurrencies-commodities-or-companies.html "Invest in cryptocurrencies, commodities or companies?") were produced and “verifiable” information that they are deforestation-free.

Failure to comply could result in [fines of up to 4% of a company’s](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") turnover in an EU country, with EU member nations required to check for compliance.

Some countries have criticised the EU plan, with ambassadors from Brazil, Indonesia, Colombia and Malaysia among those who wrote to EU leaders in July [calling the rules](https://www.financedigest.com/uk-businesses-call-for-looser-immigration-rules-to-boost-growth.html "UK businesses call for looser immigration rules to boost growth") “punitive in nature”, and burdensome and costly for developing nations.

Sinkevicius said he had visited or spoken with the governments concerned by the law, and the EU would work with [countries before 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") kick in to ensure the rules can be implemented

The EU Parliament and EU countries want a commitment that the EU will also produce a bloc-wide strategy to [support](https://www.financedigest.com/imf-and-the-national-bank-of-belgium-sign-sdr-350-million-borrowing-agreement-to-support-lending-to-low-income-countries.html "IMF and the National Bank of Belgium Sign SDR 350 million Borrowing Agreement to Support Lending to Low-Income Countries") producer countries in addressing deforestation. This was not in the Commission’s proposal, and some EU [officials said it was not clear if it would be in the final deal](https://www.financedigest.com/eu-us-working-on-deal-to-make-ev-minerals-eligible-for-tax-credits-eu-official.html "EU, US working on deal to make EV minerals eligible for tax credits -EU official").

Julia Christian from campaign group Fern said the [law’s success would depend on collaboration](https://www.financedigest.com/litigate-collaborates-with-three-leading-law-firms-to-develop-ai-litigation-platform.html "LitiGate collaborates with three leading law firms to develop AI litigation platform      ") with producer countries – as well as stronger protections of indigenous peoples’ rights.

“We’re very happy to see it happen, but we need to… use it as a jumping off point for a bigger conversation,” she said.

(Reporting by Kate Abnett; Editing by Bernadette Baum)


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