Comparing the former EUTR and upcoming EUDR: Some implications for private sector and authorities

Abstract

The EU recently adopted the regulation on deforestation-free supply chains (EUDR) to reduce its influence on global deforestation and forest degradation. The EUDR prohibits certain forest risk commodities and products made thereof on the EU market unless they are deforestation-free and legal under the legislation of the producer countries. The EUDR will replace the EU Timber Regulation (EUTR) which only covers the illegality of timber products. The EUDR concept adopts the basic approach of the EUTR, but aims to overcome weaknesses that left loopholes for non-compliant enterprises.Focusing on impacts related to enterprises in the wood sector and control authorities in the EU, we compare the specifications of both regulations, to examine whether and how weaknesses of the EUTR have been addressed by its successor regulation. It can be concluded that the EUDR closes some important loopholes that existed before, notably by introducing mandatory digital registration combined with control options for customs authorities; by increasing liability obligations for EU domestic trade; and by reducing the leeway for EU member states in the design of national legislation and enforcement. However, the EUDR creates considerable additional burdens for enterprises and control authorities through significantly expanded reporting requirements, combined with an enormous extension of the scope of application. It remains open how strongly the EUDR will affect the procurement costs of EU enterprises and subsequently their product prices – and to what extent this may trigger trade shifts in favor of less regulated countries.