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Seneca ESG
- July 6, 2023
The European Union (EU) has initiated the establishment of a joint task force with Malaysia and Indonesia to address concerns related to the implementation of the EU Deforestation Regulation (EUDR), as reported by Nikkei Asia on June 30. The EUDR, which came into effect on June 29, prohibits the import of commodities such as coffee, beef, soy into the EU if they were grown on land deforested after 2020. Malaysia and Indonesia, two major palm oil-producing countries, have criticized the regulation, claiming that it discriminates against their palm oil industries. The task force, scheduled to hold its first meeting in August, aims to discuss the implementation procedures regarding palm oil smallholders, traceability, and due diligence.
Under the EUDR, operators and traders of specified commodities and their byproducts are required to comply with rigorous due diligence obligations when exporting or trading within the EU. The obligations include traceability requirements and the provision of geolocation data to ensure transparency. Starting from June 29, 2023, operators and traders will have 18 months to adapt to the new rules, while micro and small enterprises will have a longer adaptation period. The primary objective of the regulation is to reduce carbon emissions associated with EU consumption and production of these commodities by at least 32 million tons annually and to prevent European consumers from unknowingly contributing to deforestation. In May, Indonesia and Malaysia jointly expressed their opposition to the EUDR during a mission to Brussels, arguing that the regulation would adversely affect small-scale palm oil farmers.
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