A coalition of European farmer and allied industry representatives has called for the EU Deforestation Regulation (EUDR) to be delayed, amid growing concerns the current timetable is ‘unfeasible’.
EUDR is set to be introduced at the end of this year, outlawing the use of commodities linked to deforestation, including soya. A similar regulation, the UK Forest Risk Commodity Regulation (UKFRC), with the same aims but different requirements, is set to come into force in the UK next year.
However, as the implementation date of EUDR has drawn nearer, it has become increasingly clear that the systems required to ensure sustainably-sourced soya will not be ready and that the regulation could cause huge disruption and cost within the food chain.
With less than 100 days left until its planned implementation, 29 European organisations, including Copa-Cogeca, which represents European farmers, and FEFAC, the European Feed Manufacturers’ Federation, published an open letter stressing that they fully support EUDR’s goal of eradicating deforestation and forest degradation, but are ‘still grappling with severe legal and market uncertainties’.
They said operators and traders had been calling on the European Commission and member states to provide clarification on the regulation’s requirements for months, so they can adjust their practices to comply, but stressed this ‘cannot be achieved at the last minute’.
Yet they are still missing ‘adequate responses’, and their concerns have gone unanswered. Seven member states have still not designated a competent authority for national implementation, the letter said.
“The current situation clearly shows that implementing the EUDR by the end of 2024 is simply unfeasible and would result in many small businesses being wiped out of the market and job losses in rural areas,” the organisations said.
They called for the EU authorities to take ‘immediate action’ to delay the EUDR and provide the necessary compliance tools ‘with sufficient time to prepare adequately’.
At the time of writing, the commission had not responded to the letter. The hope within the industry is that, even if its entry into regulation is not delayed, EUDR will be phased in gradually with minimal checks and enforcement, initially.
The cost of EUDR to UK livestock
Compliance with the EU Deforestation Regulation (EUDR) could cost the UK livestock sectors more than £100 million due to the disruption caused to the soya supply chain, according to the Allied Industries Confederation (AIC).
The UK uses 2.3m tonnes of SBM in feed each year. Current market information received by suppliers indicates a range of EUDR risk premiums of a minimum of 5-10% over normal price quotations for SBM for 2025, according to an AIC’s economic impact assessment of EUDR.
The assessment assumes these premiums would be applicable to EUDR-compliant SBM, whether destined for EU or UK markets, which will need to mirror the requirements.
Given a current market price for SBM of approximately £340/tonne, the direct cost to the UK livestock sector could be between £40-80 million, the assessment concludes.
The indirect cost impact over the year for additional use of other feed protein sources (rape seed meal, sunflower meal) is estimated at an additional £22.44m.
A separate assessment of the impact of the regulation on the EU feed market has concluded that the combined impact of direct extra cost for soy supplies and the expected higher additional costs for alternative protein sources may reach up to €2.25 billion in 2025.