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Setting the scene:
The Regulation and the Brazilian context
Helena Leonel Ferreira - Etifor | Valuing Nature
Contents
1. Contextualizing the Regulation
2. Introduction to the Regulation
3. The Brazilian context
Drivers of deforestation
Source: (Pendrill et al., 2019)
EU consumption impact
90% of the deforestation
caused by EU-27
imports is due to the
production of 10
commodities
Pendrill et al.(2020)
>60% Soy
Palm oil
Beef / leather
Wood products
1.Soy
2.Palm oil
3.Beef / leather
4.Wood products
5.Cocoa
6.Coffee
7.Rapeseed
8.Rubber
9.Maize
10.Sugar cane
The proposed “Deforestation Regulation”
MAIN GOALS:
• Minimize the EU’s contribution to
deforestation and forest
degradation worldwide
• Reduce the EU’s contribution to
greenhouse gas emissions and
global biodiversity loss
https://eur-lex.europa.eu/legal-content
Contents
1. Contextualizing the Regulation
2. Introduction to the Regulation
3. The Brazilian context
Basic conditions
(Article 3) Commodities shall not be placed or made available on the market or
exported, unless they are:
a) Deforestation-free
b) In accordance with the legislation of the country of production
c) Due diligence statement
Produced on land that has not been subject to deforestation or
forest degradation (wood products), after 31 December 2020
● information, data and documents
● risk assessment measures
● risk mitigation measures
Commodities and products covered
Cattle, Cocoa, Coffee, Oil Palm, Rubber, Soya, Wood
● Customs codes (HS) included in Annex I
● Many finished products not included
EU Timber Regulation (EUTR - No 995/2010)
Long experience from the timber sector
Actors in EUDR
Third country
External
producer
Operator
Trader (SME)
Trader
(non-SME)
Consumer
Operators and Traders: Due diligence system SME Traders: Traceability
Domestic
producer
Third country
Actors in EUTR / EUDR
Company A
Chipped wood
Chipped wood Company B
Particle board
Operator Trader
Due diligence
Company A
Chipped wood
Chipped wood
Company B
Particle board
Operator Operator
EUTR
EUDR
Due diligence
Actors EUDR
Company A
Chipped wood
Chipped wood Company B
Particle board
Operator
SME
Operator
Due diligence
Provide previous due
diligence statements upon
request
Products contained in/made from products that have already been subject to due diligence…
SME operators are not required to exercise due diligence (DD)
Actors EUDR
Company A
Chipped wood
Chipped wood Company B
Particle board
Operator
Non-SME
Operator May refer to previous DD statements
in their own DD statement –
after having ascertained that it was
exercised adequately
Products contained in/made from products that have already been subject to due diligence
Due diligence
Timeline
April 2023
Approval by the
EU Parliament
29 June 2023
Regulation entry
into force
May 2023
Approval by the
EU Council
June 2024
1st Review:
other wooded lands
30 December 2024
Regulation enters into
application
30 June 2025
Entry into application
for SMEs
June 2025
2nd Review: other ecosystems, commodities
& products, financial institutions
June 2028
3rd Review: impact on farmers;
circumvention; checks
2023 2024 2025
Other reviews: Every 5 years
Timeline for wood products
29 June 2023
Regulation entry into force
2023 2024 2025 2026 2027
18 months
30 December 2024
Start of obligations
for large enterprises
30 June 2025
Start of obligations for SMEs
EUTR will continue to apply until 30 December
2027 to timber and timber products that were…
Produced before
29th June 2023
Placed on the market
from 30 December 2024
Timeline
April 2023
Approval by the
EU Parliament
29 June 2023
Regulation entry
into force
May 2023
Approval by the
EU Council
June 2024
1st Review
30 December 2024
Regulation enters into
application
30 June 2025
Entry into application
for SMEs
June 2025
2nd Review
June 2028
3rd Review
2023 2024 2025
Other reviews: Every 5 years
Benchmarking system
Benchmarking system
High risk
Medium risk
Low risk
9%
3%
1%
Simplified due diligence
Checks
Assessment criteria
● Rate of deforestation and forest
degradation
● Rate of expansion of agriculture
land
● Production trends of relevant
commodities/products
Other (international agreements;
national laws; data transparency;
etc)
Challenges
1. No deforestation (legal or illegal)
2. Forest degradation monitoring
3. Origin of products at farm level:
Geolocalization
1. Adaptations in production systems
2. Forest degradation causes
3. Production segregation
Producers
Importers
Geolocalization
At least one point of latitude
and one of longitude
Less or equal to 4 ha
and/or
Cattle
Polygons: sufficient points to
describe the perimeter of the plot
More than 4 ha
and
Production other than cattle
Along with date or time range of production
Geographical location of a plot of land, described by
Challenges
1. No deforestation (legal or illegal)
2. Forest degradation monitoring
3. Origin of products at farm level:
Geolocalisation
1. Adaptations in production systems
2. Forest degradation causes
3. Production segregation
Producers
Importers
Provide verifiable information
Contents
1. Contextualizing the Regulation
2. Introduction to the Regulation
3. The Brazilian context
Associated deforestation
Associated deforestation in Brazil’s exports to the EU (2005-2018)
Cattle
216 thousand ha
Cocoa
733 ha
Coffee
7,3 thousand
Soya
628 thousand ha
Rubber
2 ha
Oil palm
1,6 thousand ha
Wood
112 thousand ha* Pendrill et al. (2022)
Forest in the Brazilian context
Forest according to FAO:
“Land with a tree canopy cover of more
than 10 percent and area of more than 0.5
ha. The trees should be able to reach a
minimum height of 5 m at maturity in situ”
27% of natural ecosystems (270
Mha) not included in this definition.
Left uncovered by the
zero-deforestation condition.
MapBiomas Project (2022). Potential impacts of due diligence criteria on the protection of threatened South American non-forest natural ecosystems
Commodities production
Amazon
Caatinga
Cerrado
Atlantic Forest
Pampa
Pantanal
Biomes
Commodities production
Amazon
Caatinga
Cerrado
Atlantic Forest
Pampa
Pantanal
Biomes
69%
~100%
Instruments in place
● SisBov
● GTFI Tools Map and best practices
● Beef on Track
● Selo Verde
Satellite imagery:
● PRODES (Program to Calculate
Deforestation in the Amazon)
● DETER (Real Time System for
Detection of Deforestation)
● SAD (Deforestation Alerts System)
● MapBiomas
● Soy Moratorium Monitoring System
● Soy on Track
● Sinaflora
● Simex
Thank you
Helena Chiaretti Leonel Ferreira - Etifor | Valuing Nature
helena.leonel@etifor.com

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Setting the scene: the Regulation and the Brazilian context | Navigating the new deforestation-free products regulation

  • 1. Setting the scene: The Regulation and the Brazilian context Helena Leonel Ferreira - Etifor | Valuing Nature
  • 2. Contents 1. Contextualizing the Regulation 2. Introduction to the Regulation 3. The Brazilian context
  • 3. Drivers of deforestation Source: (Pendrill et al., 2019)
  • 4. EU consumption impact 90% of the deforestation caused by EU-27 imports is due to the production of 10 commodities Pendrill et al.(2020) >60% Soy Palm oil Beef / leather Wood products 1.Soy 2.Palm oil 3.Beef / leather 4.Wood products 5.Cocoa 6.Coffee 7.Rapeseed 8.Rubber 9.Maize 10.Sugar cane
  • 5. The proposed “Deforestation Regulation” MAIN GOALS: • Minimize the EU’s contribution to deforestation and forest degradation worldwide • Reduce the EU’s contribution to greenhouse gas emissions and global biodiversity loss https://eur-lex.europa.eu/legal-content
  • 6. Contents 1. Contextualizing the Regulation 2. Introduction to the Regulation 3. The Brazilian context
  • 7. Basic conditions (Article 3) Commodities shall not be placed or made available on the market or exported, unless they are: a) Deforestation-free b) In accordance with the legislation of the country of production c) Due diligence statement Produced on land that has not been subject to deforestation or forest degradation (wood products), after 31 December 2020 ● information, data and documents ● risk assessment measures ● risk mitigation measures
  • 8. Commodities and products covered Cattle, Cocoa, Coffee, Oil Palm, Rubber, Soya, Wood ● Customs codes (HS) included in Annex I ● Many finished products not included EU Timber Regulation (EUTR - No 995/2010) Long experience from the timber sector
  • 9. Actors in EUDR Third country External producer Operator Trader (SME) Trader (non-SME) Consumer Operators and Traders: Due diligence system SME Traders: Traceability Domestic producer Third country
  • 10. Actors in EUTR / EUDR Company A Chipped wood Chipped wood Company B Particle board Operator Trader Due diligence Company A Chipped wood Chipped wood Company B Particle board Operator Operator EUTR EUDR Due diligence
  • 11. Actors EUDR Company A Chipped wood Chipped wood Company B Particle board Operator SME Operator Due diligence Provide previous due diligence statements upon request Products contained in/made from products that have already been subject to due diligence… SME operators are not required to exercise due diligence (DD)
  • 12. Actors EUDR Company A Chipped wood Chipped wood Company B Particle board Operator Non-SME Operator May refer to previous DD statements in their own DD statement – after having ascertained that it was exercised adequately Products contained in/made from products that have already been subject to due diligence Due diligence
  • 13. Timeline April 2023 Approval by the EU Parliament 29 June 2023 Regulation entry into force May 2023 Approval by the EU Council June 2024 1st Review: other wooded lands 30 December 2024 Regulation enters into application 30 June 2025 Entry into application for SMEs June 2025 2nd Review: other ecosystems, commodities & products, financial institutions June 2028 3rd Review: impact on farmers; circumvention; checks 2023 2024 2025 Other reviews: Every 5 years
  • 14. Timeline for wood products 29 June 2023 Regulation entry into force 2023 2024 2025 2026 2027 18 months 30 December 2024 Start of obligations for large enterprises 30 June 2025 Start of obligations for SMEs EUTR will continue to apply until 30 December 2027 to timber and timber products that were… Produced before 29th June 2023 Placed on the market from 30 December 2024
  • 15. Timeline April 2023 Approval by the EU Parliament 29 June 2023 Regulation entry into force May 2023 Approval by the EU Council June 2024 1st Review 30 December 2024 Regulation enters into application 30 June 2025 Entry into application for SMEs June 2025 2nd Review June 2028 3rd Review 2023 2024 2025 Other reviews: Every 5 years Benchmarking system
  • 16. Benchmarking system High risk Medium risk Low risk 9% 3% 1% Simplified due diligence Checks Assessment criteria ● Rate of deforestation and forest degradation ● Rate of expansion of agriculture land ● Production trends of relevant commodities/products Other (international agreements; national laws; data transparency; etc)
  • 17. Challenges 1. No deforestation (legal or illegal) 2. Forest degradation monitoring 3. Origin of products at farm level: Geolocalization 1. Adaptations in production systems 2. Forest degradation causes 3. Production segregation Producers Importers
  • 18. Geolocalization At least one point of latitude and one of longitude Less or equal to 4 ha and/or Cattle Polygons: sufficient points to describe the perimeter of the plot More than 4 ha and Production other than cattle Along with date or time range of production Geographical location of a plot of land, described by
  • 19. Challenges 1. No deforestation (legal or illegal) 2. Forest degradation monitoring 3. Origin of products at farm level: Geolocalisation 1. Adaptations in production systems 2. Forest degradation causes 3. Production segregation Producers Importers Provide verifiable information
  • 20. Contents 1. Contextualizing the Regulation 2. Introduction to the Regulation 3. The Brazilian context
  • 21. Associated deforestation Associated deforestation in Brazil’s exports to the EU (2005-2018) Cattle 216 thousand ha Cocoa 733 ha Coffee 7,3 thousand Soya 628 thousand ha Rubber 2 ha Oil palm 1,6 thousand ha Wood 112 thousand ha* Pendrill et al. (2022)
  • 22. Forest in the Brazilian context Forest according to FAO: “Land with a tree canopy cover of more than 10 percent and area of more than 0.5 ha. The trees should be able to reach a minimum height of 5 m at maturity in situ” 27% of natural ecosystems (270 Mha) not included in this definition. Left uncovered by the zero-deforestation condition. MapBiomas Project (2022). Potential impacts of due diligence criteria on the protection of threatened South American non-forest natural ecosystems
  • 25. Instruments in place ● SisBov ● GTFI Tools Map and best practices ● Beef on Track ● Selo Verde Satellite imagery: ● PRODES (Program to Calculate Deforestation in the Amazon) ● DETER (Real Time System for Detection of Deforestation) ● SAD (Deforestation Alerts System) ● MapBiomas ● Soy Moratorium Monitoring System ● Soy on Track ● Sinaflora ● Simex
  • 26. Thank you Helena Chiaretti Leonel Ferreira - Etifor | Valuing Nature helena.leonel@etifor.com