To counter climate change and biodiversity loss, European regulations require companies to ensure that products sold in the EU are not the result of deforestation practices.

The European Parliament has definitively approved a law that stipulates that companies can only sell products within the European market if their supplier has issued a “due diligence” declaration confirming that the product does not come from deforested land and has not contributed to the degradation of forests, including irreplaceable primary forests.

Authorities of the European Union will have access to information provided by companies, such as geolocation coordinates, and will carry out checks using satellite monitoring tools and DNA analysis to verify the origin of the products. Sanctions for violations of the new rules include a maximum fine of at least 4 percent of the operator’s or trader’s total annual turnover in the EU. The regulation reflects the desire of European citizens to no longer promote global deforestation through their consumption. After the legislation came into force at the end of June 2023, operators and traders now have 18 months to prepare for compliance.

Recently, the World Resources Institute (WRI) published the 2022 Outlook on anti-deforestation policies adopted by commodity-producing countries. The report highlights the results achieved by the palm oil industry in reducing the exploitation of the planet’s “green lungs.”

According to the findings, between 2021 and 2022, there was a dramatic erosion of 4.1 million hectares of forests in the tropical belt of the planet. The countries that experienced the most intense deforestation are Brazil and the Democratic Republic of Congo. Ecosystems are subject to significant population growth, as well as intensive exploitation of local natural resources. In analyzing data on anti-deforestation policies, the Think Tank “Competere.eu,” reported that when considering palm oil-producing countries, especially the top four importers in Europe – Indonesia, Malaysia, Colombia, and Guatemala – one can see the virtuous cycle partly triggered by EU regulations, which have encouraged the adoption of anti-deforestation policies, and partly realised thanks to the foresight of businesses themselves who have embraced sustainability as a challenge to introduce technological innovations and invest in economic sustainability.

Indonesia and Malaysia have already managed to keep deforestation rates at historic lows. The loss of primary forests in Indonesia has decreased by 64 percent. In Indonesia, this decrease was made possible by the implementation of effective national-level fire prevention measures, as well as a renewed commitment to peatland restoration and mangrove rehabilitation.

Similar commitments in Malaysia have contributed to a 57 percent reduction in forest loss since 2022. The consistent rates observed since 2020 can be aeributed to various factors, including mandatory certification becoming increasingly a guarantee for consumers and environmental protection.