EU's green rules challenge food industry

The food industry has warned it has had insufficient time to prepare for new rules issued by the European Union on carbon emissions, claiming proposals from lawmakers lack detail and will fail to halt deforestation.

The EU is set to enforce rules by the end of next year that will require companies to verify that their products are not associated with recently deforested land, the Financial Times reported.

The bloc's groundbreaking decision to ban imports of deforestation-linked products will impact commodities such as palm oil, coffee, cocoa, beef, soy and rubber, and will make it the first region to implement such a restriction.

Lawmakers in Brussels have not yet finalized a list of "high-risk" countries for extra checks on exported commodities. This selection process, crucial for shaping future supply chains, has faced diplomatic challenges due to objections from agricultural nations in the Global South.

Nathalie Lecocq, director-general of the EU's vegetable oil trade group Fediol, told the FT the directives had come too late.

"It is not sufficient (for the EU) to come up with guidelines in December 2024," she said. "In certain instances, you need to invest … you cannot wait until the last minute."

Food companies operating in the EU will be required to accurately locate the land plots where their commodities were produced and provide the coordinates to EU authorities for checks, the extent of which will depend on the deforestation risk rating of the producing country, raising uncertainty among companies about how strict the EU will be in enforcing the rules.

The food industry is facing contract negotiation challenges and is seeking to determine who will bear the cost of fines for noncompliance, while criticism is directed toward the EU for its broad definition of deforestation, potentially resulting in a two-tier system and higher prices for European consumers, according to industry professionals cited by the FT.

However, Gert van der Bijl, a senior EU policy adviser for nonprofit Solidaridad, said the food industry has had sufficient time to prepare for the new EU rules on deforestation, as the regulation has been in development since 2015.

Van der Bijl said food companies that did not adequately prepare may shift their operations to countries with stronger infrastructure and traceability systems, thereby excluding smallholders in poorer nations, and suggested that the EU and companies should collaborate with producing countries to prevent this outcome.

Food industry experts highlighted the need for companies to prioritize sustainability beyond traceability requirements, work with smallholders in high-risk areas, take a holistic approach involving farmers, civil society and local governments, and the importance of timely preparation for compliance with the deforestation regulation.