Potential impact on shipping

Cargo ships regularly carry wood as cargo or to secure cargo (e.g. as dunnage). Consequently, large quantities of wood are transferred into and out of the EU each day. Wood may be discarded by Stevedores, require sorting by crew and be damaged whilst loading or discharging leaving debris.

Owners, Charterers and others in the shipping value chain should take note of the EU commission’s advice on Trading and shipping which is extracted below for your ease.

“Trading and shipping”

Deforestation-free and legal commodities must be kept separate from other goods while being traded and shipped. Mixing compliant and non-compliant commodities or commodities of unknown origin is not allowed. In such cases, the whole shipment would be non-compliant and cannot be placed on the EU market.”

The commercial consequences could be significant for those not complying with this requirement.

EUDR in a nutshell

Deforestation remains a major global issue, impacting climate change, biodiversity, water quality and several other factors. The European Union (EU) has introduced a new regulation to address this issue.

(EUDR) came into force on 29th June 2023 with the end of the implementation period falling on 30th December 2024 for operators and traders within its scope. It aims to:

Avoid the listed products Europeans buy, use, and consume contributing to deforestation and forest degradation in the EU and globally.
Reduce by at least 32 million tonnes a year the carbon emissions caused by the consumption and production of relevant commodities in the EU.
Address all deforestation driven by agricultural expansion to produce the commodities in the scope of the regulation, as well as forest degradation.

What is Prohibited?

The relevant commodities and products can’t be supplied to the EU market or exported from the EU unless they meet the following criteria:

Deforestation-free*

Relevant legislation in the country of production has been followed.

Covered by due diligence statement.

*Regulation sets a deforestation cut-off date of 31 December 2020

EUDR interface with shipping & EU Commission feedback

Let’s look at the description of traders and operators because they are the primary focus of EUDR.

Traders:

Those in the supply chain, other than the operator, who make relevant products available on the market through a commercial activity.

Operator

Any natural or legal person who exports or places on the market relevant products during a commercial activity.

Carriers – their exposure

Whilst a carrier is instrumental to the supply chain they don’t place or supply these goods to EU market.
EU Commission feedback

To bring some certainty on who is caught by EUDR we enquired with the EU Commission and their feedback is summarised below:

The commission is working on guidelines to elaborate on below points of the regulation before it comes into force, but they are not ready yet:

Definition of agricultural use

Issues related to agroforestry, agricultural land, legality and on other aspects that are of interest to many stakeholders on the ground.

The commission also uses their muti-stakeholder platform to formulate relevant guidance in relation to Protecting and Restoring the World’s Forests. The Frequently Asked Questions found below were formed by frequent questions received by the Commission from relevant stakeholders and will be updated over time. If needed, additional facilitation tools will be mobilised.

Source: North Standard