EUDR eyes new country category: ‘negligible risk’

It seems that everyone has a different view on how the European Union Deforestation Regulation (EUDR) evaluates risk.

Under the new law, countries are split into three categories: high, standard or low risk. The higher the risk, the more thorough the due diligence required from food businesses sourcing from that country.

How countries are benchmarked could markedly influence commodity sourcing decisions. For example, if a European food company has to choose between buying soy from a standard-risk or low-risk country, it could well pick the low-risk one because it involves less paperwork and fewer checks.

That’s why country representatives are calling for benchmarking reform.

Some want more attention paid to the high-risk category, while others want a fourth classification introduced that’s even less risky than low-risk: ‘negligible risk’.

What does ‘negligible risk’ mean for EUDR?Most countries, including all EU member states, are classed as low risk under the deforestation law.

Low risk is the best classification a country can hope for. It tells food companies that they can source key ingredients from that country with minimal paperwork and fewer administrative requirements.

Which commodities are impacted by EUDR?The EUDR covers seven commodities most tightly linked to deforestation: cattle, cocoa, coffee, oil palm, rubber, soy and wood. 

Products derived from these commodities also fall under the scope the EUDR.

But for some member states, ‘low risk’ is not, well, ‘low’ enough. Earlier this month, MEPs tabled motions for the Commission to add a new category into the EUDR classification system. Today, those motions were adopted by the European Parliament’s Committee on Environment, Public Health and Food Safety (ENVI).

A ‘negligible’ or ‘no risk’ category would mean relevant commodities could enter the EU with little or no scrutiny. The category would “reflect the reality” that in some countries, the risk of deforestation is “effectively negligible” due to three factors, explains Austrian MEP Alexander Bernhuber: robust legal frameworks, low land-use change dynamics, and sustainable land management practices.

Another MEP, Mathilde Androuët from France, also called for a list of ‘negligible’ countries to be exempt from geolocation requirements and relevant checks.

‘Negligible risk’ category adopted, but pushback remainsAlthough the ENVI Committee adopted the motion for a ‘negligible risk’ category, it doesn’t mean a fourth category will be added to the EUDR benchmarking system. It does, however, represent a step towards a potential policy change.

There are concerns about adding a ‘negligible risk’ category. In theory, an ingredient or product associated with illegal deforestation could more easily enter the EU (via a ‘no risk’ country), and then be freely traded within member states.

MEPs are calling for some ‘low risk’ countries to be reclassified as ‘negligible risk’. (Image: Getty/evandrorigon)Other concerns surround MEPs Bernhuber and Androuët’s proposals for so-called compensation mechanisms. Under such a scheme, a country could achieve a lower risk classification by reforesting elsewhere.

Forest campaigners are up in arms, arguing that MEPs are gambling with forests, the climate, and forest communities’ rights. “Politicians who claim to support business competitiveness have sown uncertainty and confusion; pushing companies and countries who have invested in preparing to implement this desperately needed law,” says Nicole Polsterer, campaigner at forests and rights NGO, Fern.

“The Commission must hold firm: no more excuses, no reopening, no more delays.”

Calls for a reevaluation of risky countriesThe European Commission has classed just four countries ‘high risk’. And no, they’re not the countries most in the news headlines over deforestation. They’re countries under EU council sanctions: Belarus, North Korea, Myanmar and Russia.

Also read → How much deforestation do EUDR ‘high-risk’ countries actually have?For some MEPs, the ‘high risk’ classification doesn’t accurately capture deforestation “hot spots” across the globe.

Reading between the lines, we understand this to mean that some countries labelled ‘standard risk’ – such as palm oil producing Indonesia and Malaysia, as well as major soy and beef producer Brazil – are not in the right category, according to MEPs from political groups Renew, S&D, Greens and Left, as well as former shadow rapporteurs on the EUDR. “We strongly believe that it can, and we urge for it, to be swiftly addressed.”

Do ‘high risk’ country categories accurately reflect deforestation “hot spots”? (Image: Getty/luoman)While this group wants more attention paid to the ‘high risk’ category, it’s against setting up a ‘no risk’ or ‘negligible risk’ country classification. Doing so would block EUDR’s anti-deforestation objectives, they say. “It’s not the time to create legal uncertainty while companies based in the EU have already committed substantial resources and have invested in achieving compliance with the EUDR.”

What is certain is that the EUDR is quickly evolving into something quite different from what was originally agreed upon. After a year-long delay and a round of simplifications, the final version may look very different from the one that was voted in.