The European Commission proposed a law on Wednesday aimed at preventing the import of commodities linked to deforestation by requiring companies to prove their global supply chains are not contributing to the destruction of forests.
Failure to comply could result in fines of up to 4% of a company’s turnover in an EU country.
Many European companies operate in countries where environmental abuses are rife, but there is currently no EU-wide requirement for them to find and fix risks to the environment in their global supply chains.
Emissions from the land-use sector, most of which are caused by deforestation, are the second major cause of climate change after the burning of fossil fuels, and world leaders agreed at this month’s COP26 summit to end deforestation by 2030.
“To succeed in the global fight against the climate and biodiversity crises we must take the responsibility to act at home as well as abroad,” EU climate policy chief Frans Timmermans said.
If the law is approved by EU governments and the European parliament, companies operating in the 27-nation EU will have to show the commodities specified were produced in accordance with the laws of the producing country.
They will also have to show the commodities were not grown on any land deforested or degraded after Dec. 31, 2020, even if it is legal to produce there according to producing country law.
“The deforestation regulations we are putting on the table are the most ambitious legislative attempts to tackle these issues worldwide ever,” said EU environment commissioner Virginijus Sinkevičius.
The Commission hopes the law will be passed by 2023, with large companies given a 12-month grace period to comply and smaller ones a 24-month grace period.
