Forest sector buckles down to comply with Deforestation Regulation

The European Union’s Deforestation Regulation will cause a massive amount of red tape for the forest sector. ‘We’ll just have to see what this will lead to. But since the regulation is in force, we’ll naturally comply with it,’ says Maija Rantamäki at the Finnish Forest Industries Federation.

The European Union’s Deforestation Regulation was published in June, and it entered into force later that month. Its purpose is to minimise the EU’s contribution to global deforestation and forest degradation.

The regulation stipulates that for every wood-based product must have proof that making it has not degraded the forests. Examples of degradation  include taking forest land into agricultural use or converting ‘primary forest’ into commercial forest.

This must be shown for each forest holding that has supplied raw wood for the product in question.

At the Finnish Ministry of Agriculture and Forestry, implementing the regulation is being prepared by Senior Specialist Viktor Harvio. According to Harvio, it is important to distinguish between deforestation and forest degradation, both mentioned in the regulation, but for example for the forest sector in Finland, the latter is more significant.

The regulation stipulates that operators and traders dealing with raw wood or wood products, such as the forest owner, must have information on which forest holdings may have supplied wood used in the product.

‘This information must be passed on to the EU Commission. In addition, a due diligence statement must be submitted, stating that forest has not been degraded,’ says Maija Rantamäki, Manager of International and EU Forest Affairs at the Finnish Forest Industries Federation.

Having received these, the Commission will issue a reference number identifying the specific felling operation. This makes it possible to identify the forest holding where the felling was made.

The forest company that manufactures forest products will link the reference number to its product batch number. The reference numbers and due diligence statements will be kept for five years.

The source of the raw material for each product must have an individual ID

‘In other words, every plank, milk carton or a pack of office paper found in a shop must be ID’d so that when you send the ID to the competent authority, they can look up the reference number and the felling site and so assure that the product has not caused deforestation or forest degradation,’ says Rantamäki.

In Finland, the competent authority is likely to be the Finnish Food Authority.

Even before the regulation came into force, the forest sector began preparing for it. The details of the system regarding wood products will be hammered out during the transition period by the end of 2024.

A considerable number of clerical routines must be set up. One single product batch may require thousands, or even tens of thousands, of reference numbers.

‘There is concern over the mass of reference numbers needed, and with reason,’ says Harvio.

Rantamäki thinks that ‘we’re in for interesting times’.

‘There’s no going back. Now that the regulation has been enacted, we’ll comply with it as a matter of course,’ Rantamäki says.

Forest certification was not considered sufficient

A telling example is a pack of copier paper. Depending on the grade, it may have been manufactured from 3–4 different grades of pulp coming from different mills.

The paper manufacturer must be sure that each of the mills has submitted a due diligence statement for each bale of pulp used. Likewise, the pulp mill must determine, in the manner specified in the regulation, the source of the raw wood used, not only for fellings the mill itself has had made, but also for wood from the secondary market. The latter is wood bought from, for example, a sawmill that has carried out a clear felling and netted not just logwood, but also fibrewood that it has no use for.

Reference numbers will also be needed for sawmill offcuts, which are sold to pulp mills.

In Finland alone, the quantity of reference numbers needed each year will be considerably more than 100,000, since that is how many fellings are carried out here every year. One felling site will supply wood for innumerable different products. Whether one felling operation will be ID’d by the same reference number in all these products is as yet unclear.

What is the rationale behind this massive red tape? Could the matter not have been solved with the help of forest certification systems, such as PEFC or FSC?

‘We did propose this, but the Commission could not see their way to using it. They don’t have enough trust in forest certification and don’t take it into account,’ says Rantamäki.

Control to be exercised throughout the world

The regulation contains numerous detailed requirements.

‘If the forest holding is under four hectares in size, to get a reference number you only need to supply the geolocation of its centre. But if it’s bigger, the process is more complicated,’ says Rantamäki.

The regulation also applies to imports to and exports from the EU.

‘The trader or exporter must submit a due diligence statement if a wood product is exported from the EU. The same applies to imported wood products,’ Rantamäki explains.

It therefore appears that the Commission will be issuing reference numbers to all parts of the world that wood products are imported from into the EU.

Besides wood, the regulation affects other forest raw materials, such as cocoa, palm oil, soya, rubber and coffee. It also affects cattle, with the result that, at least according to the first interpretation of the regulation, putting up a cattle shed is forbidden if the site must be cleared of trees first.

So far, only preliminary assessments have been made of the resources needed by Finnish authorities to manage the regulation.

‘Speaking of wood, the Finnish Food Authority already manages the tasks related to the EU timber regulation and the permit system to ensure the legality of timber. Now, however, the requirements are getting somewhat stricter,’ says Harvio.