EU Timber Regulation Research Articles

Analyzing the Impact of EU’s Legality Requirements Policies on Sustainable Timber and Sawnwood Trade—Focusing on Tropical Wood Trade

This study analyzes the impact of the EU′s policy to prohibit the import of illegally harvested timber on the trade of tropical timber and sawnwood. The analysis uses a difference-in-differences approach based on gravity models, with panel data from over 193 countries that trade tropical timber and sawnwood. The result of the analysis shows that the European Union Timber Regulation (EUTR) reduces the trade of illegally harvested timber. It further suggests that the EUTR caused a relatively larger reduction in tropical sawnwood (−0.21%) than that of tropical timber (0.07%). In addition, the Voluntary Partnership Agreement (VPA) appeared to cause a significant reduction in tropical sawnwood (−0.07~−0.05%), whereas tropical timber did not appear to have been significantly impacted. In particular, the reduction in timber exports in countries that have signed the VPA, which aims to encourage exports of legally produced timber, has significant implications for both the EU and timber exporters preparing for the VPA, as both parties strive to expand the VPA. The results of this study suggest that the EU needs to make additional efforts to address the decline in exports from countries that signed the VPA.

How and Why Do Economic Operators Comply With EU Law? Analysis of Firm‐Level Responses to the EU Timber Regulation in Germany

AbstractThe European Union (EU) Timber Regulation (EUTR) formally requires EU operators to conduct due diligence along their supply chains to prevent illegally sourced timber products from entering the European market. Little is known about the regulatory behaviour and motivations of operators to comply with this regulation. We explore the regulatory behaviour of companies by applying a synthesis of behavioural theories of regulatory compliance and transnational market regulation. Informed by qualitative and quantitative mixed methods, this study finds that EUTR compliance is influenced by operators' regulative, economic, normative and cultural‐cognitive motivations. The empirical analyses reveal that larger, publicly exposed companies are driven to comply through social pressure and the deterrence effect of sanctions and control. Operators' perceptions of the costs and benefits do not explain compliance behaviour in a significant, quantitative way. The Internal values to abide by the law are found to be a stronger motivator than economic cost–benefit calculations.

External Europeanization through timber trade agreements: Tracing causality in environmental governance reform

The business models of tropical timber production have long been configured around illegal practices that cause environmental degradation and hinder socioeconomic progress in the Global South. However, the global corporations trading timber often point to regulatory governance weaknesses in the jurisdictions where they source timber as hindering efforts to address illegalities in their supply chains. In an innovative response, the European Union (EU) combines mandatory due diligence for timber imports – the EU Timber Regulation (EUTR) – with EU Forest Law Enforcement, Governance and Trade (FLEGT) Voluntary Partnership trade Agreements (VPAs) that offer finance, technology transfer, and capacity building to support domestic regulation in timber exporting countries. Through process tracing, we assess the extent to which the EU's efforts have been effective in reforming domestic environmental governance to reduce illegal logging in Cameroon and Ghana. This allows for understanding the potential of external Europeanization, a theoretical approach explaining how and why countries (and the businesses they regulate) outside of the EU might adapt their domestic governance institutions and processes to EU rules and norms. As the EU considers similar approaches to regulate forest-related illegalities and deforestation in global agricultural supply chains, it is important to take stock of past and on-going policy efforts. We find that the causal mechanisms embedded in FLEGT have lost their transformative potential due to unfinished domestic reforms, the technocracy of supply chain traceability systems, and market leakage. Our findings suggest the VPA deliberations underpinning supply-side efforts have not shifted the power balance but rather distracted from the reality that there will be winners and losers as the countries shift toward a more transparent and accountable political economy.

Effect of the Timber Legality Requirement System on Lumber Trade: Focusing on EUTR and Lacey Act

This study provides novel insights into the policy effects of timber legality verification methods, specifically Due-diligence (under the European Union Timber Regulation (EUTR)) and Due-care (under the Lacey Act), on coniferous and non-coniferous lumber trade, highlighting their significance in the context of global lumber trade. Timber legality verification plays a pivotal role in the global timber trade. We comprehensively assess the impact of verification methods on coniferous and non-coniferous lumber trade, utilizing two decades of trade data (1997–2017) across approximately 160 countries. We employ the difference-in-differences method based on the gravity model of international trade, utilizing robust export–import data and demographic profiles. Our findings demonstrate that the effect of EUTR on coniferous lumber imports ranged between −0.32% and −0.05%, and that on non-coniferous lumber imports ranged between −0.44% and −0.05%, whereas the effect of the Lacey Act on coniferous lumber imports ranged between −0.93% and −0.09%. Non-coniferous lumber imports remained unaffected. The Voluntary Partnership Agreement (VPA) led to decreased exports to the EU and US. Our findings hold two key implications. First, Due-diligence exhibits more consistent policy effects than Due-care. Second, supporting VPA-participating countries is crucial for facilitating timber trade. These insights inform timber trade policies and sustainable practices.

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

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.

Alignment of National Forest Policy Frameworks with the EU Timber Regulation Requirements: Insights from Montenegro and the Republic of Srpska (Bosnia and Herzegovina)

The Western Balkans represent a priority area for improving forest legality monitoring systems in line with the European Union Timber Regulation (EUTR). However, research on EUTR implementation in Western Balkan countries is still sporadic with a limited geographical scope; therefore, the preparedness of forestry sector actors for the EUTR in the region is largely unknown. The main objective of this study is to determine to what extent the forest policy frameworks of Montenegro and the Republic of Srpska (Bosnia and Herzegovina) are aligned with the EUTR requirements. To achieve this aim, we applied a qualitative content analysis of policy documents identified via an expert-based approach. Our results show that both countries have well-developed policy frameworks addressing illegal logging and preventing illegal activities in forestry, especially through dedicated action plans. Key actors in both countries are public, including the ministries responsible for forestry, public forest enterprises, and forestry inspectorates. The forestry sector in Montenegro is facing significant changes due to the termination of forest concessions and the reorganization of the management of state forests, including forest certification. The Republic of Srpska has relatively well-established institutional bodies for EUTR implementation but, in some cases, insufficient exchange of information and cooperation among them. Our findings indicate that the forestry sectors in Montenegro and the Republic of Srpska (as well as in Serbia, Croatia, and Slovenia, as per previous research) are dynamic, undergoing various changes, so there is room for improvement in terms of capacities (e.g., human, technological, infrastructural), legal responsibilities, and information access and availability. With an increasing focus on “deforestation-free” commodities within the EU and global policy arena, a new, more demanding, and broader regulation is expected at the EU level, replacing the EUTR. The incoming regulation will expand existing EUTR requirements, likely posing severe challenges to many EU member countries. This could be even more challenging for countries with less developed or advanced systems to enforce legality requirements, including Western Balkan countries.

Stable Isotope Ratio Analysis for the Comparison of Timber From Two Forest Concessions in Gabon

Consumers are becoming increasingly aware of the environmental impacts caused by deforestation and illegal logging and there is an increasing demand for supply chain transparency and traceability of wood products. Many importing and exporting nations have implemented regulations which aim to control the origin and species of traded timbers of high ecological importance and economic value. However, despite growing interest in method development for timber authentication purposes, many studies have been limited by insufficient numbers of authentic timber reference samples. Our aim was to address the differences in stable isotope ratio profile of bulk, homogenized wood samples collected from living or recently felled trees in two FSC concessions in Gabon, which are approximately 240 km apart, for the purposes of origin classification and protecting valuable forest commodities. Forty-seven timber samples comprising 10 genera of tropical trees were obtained using a Pickering Punch sampling device or chainsaw from two forest concessions in Gabon (Precious Woods Group and Compagnie des Bois du Gabon) during July 2019. Samples were subject to δ18O, δ2H, δ13C, δ15N, and δ34S stable isotope analysis using elemental analysis-isotope ratio mass spectrometry (EA-IRMS). Results show that significant differences are evident in the stable isotope ratios of Aucoumea klaineana between Precious Woods Group and Compagnie des Bois du Gabon forest concessions. Relationships are evident between climatic and geological variables and the stable isotope ratios of the samples suggesting that further degrees of origin classification may be achievable in Gabon. For other species, insufficient numbers meant the possibility to determine discriminating factors between the two concessions was limited though data from these samples may prove useful to contribute to the understanding of stable isotope variability in tropical timber. The data presented establish a basis for evaluating origin claims of forest products and timber from the Compagnie des Bois du Gabon and Precious Woods Group concessions and lay a foundation for future development of timber tracking technologies in Gabon. The technique can be used for purposes of due diligence or forensic investigation by law enforcement as part of demand-side regulations such as the EU Timber Regulation, Illegal Logging Prevention Act, or the Lacey Act.

Evidence Emerging from the Survey on European Union Timber Regulation [REG. (EU) 995/2010] in Italy

Illegal logging is a pervasive problem of major international concern that causes many negative social, economical and environmental consequences. EUTR is a tool adopted in 2010 and entered into force in 2013 to stop the trade of timber illegally logged within the EU market. The implementation in Italy is still in progress and varies among regions. This study considers the respondents’ opinions on different EUTR characteristics, implementation processes and compliance activities. Taking Italy as an example, the questionnaire was delivered to relevant Italian foresters and timber operators in the forest-timber system. Two hypotheses are under verification: 1) if Italian forest-wood-timber sector integrated EUTR into its activity and 2) if the Italian Due Diligence system is a valid model to other countries. The questionnaire has been submitted to the wood industry stakeholders. It has been organized into six sections to collect information about the professional characteristics of respondents, their experiences on EUTR, the opinion about EUTR and FLEGT, the support received on EUTR implementation, the opinion about the checks system, and the role of EUTR in marketing timber products. Questionnaire data have been elaborated in different ways. Conclusion underlines the EUTR Italian system criticalities and some suggestions for a more effective use of EUTR in the wood market. The picture that emerges from the results collected is that the EUTR, although proposed for morally and ethically valid purposes, doesn’t have unanimous effectiveness. In particular, EUTR can generate a distortion of the market, new expenditures for importers. Various operators applaud the role of certification schemes for sustainable forest management, which indirectly makes it possible to prevent the aforementioned problem. The Italian EUTR system is working only for satisfying Regulation 995/2010 targets. This must be considered as the starting point; however, three innovative topics could be developed in the future: digitalization and computerization of EUTR certification, integration of EUTR certification with forest certifications schemes and other quality certifications, and use of EUTR in the marketing initiatives.

The Implementation of Supply Chains Responsibilities by Public Authorities in Germany

The contribution provides a rough introduction and evaluation of the implementation of supply chain responsibilities in Germany by administrative authorities using the example of the implementation of the EU Timber Regulation with a view to the introductory measures of the 3TG Regulation and the German Supply Chain Due Diligence Act (Lieferkettengesetz).

Adaptation to EUTR Requirements: Insights from Slovenia, Croatia and Serbia

Eight years after the European Union Timber Regulation (EUTR) came into force, its effectiveness is still unsatisfactory due to deficient and uneven implementation among member states. In addition, some Western Balkan countries have poor legality monitoring systems, increasing the risk of trade in illegally harvested timber. Regardless of this, no recent work has analyzed the adaptation of national forest policies to the EUTR obligations. Our study aims to contribute to the understanding of EUTR implementation by analyzing the adaptation of policies of the Western Balkan countries (Slovenia, Croatia, and Serbia) to the EUTR. Qualitative content analysis was conducted on 22 policy documents from Slovenia, Croatia, and Serbia. Documents were coded using coding categories derived from EUTR. Our results point out that none of the analyzed countries have a policy to directly address illegal logging or prevention of illegal activities. As EU members, Slovenia and Croatia has implemented EUTR through laws. The Slovenian Forest Act addresses all EUTR obligations, while Croatian Law on EUTR Implementation does not directly address the obligation of legality. This obligation is addressed by the Law on Forests. As Serbia is not an EU member, it did not implement EUTR. Nevertheless, Serbian Law on Forests addresses all EUTR obligations, but has some discrepancies regarding Traceability obligation. With ongoing discourses on Green Deal policies and the increasing focus on “deforestation-free” commodities, stricter implementation might be expected of EUTR at EU level. Most countries would probably have to build capacities for EUTR implementation and become more transparent and responsible concerning information availability. To successfully implement EUTR, an increased number of checks as well as stricter fines will be needed.

Inference of origin of Pterocarpus timber by chemical profiling of ambient ionization mass spectra

In Pterocarpus, three out of 46 tree species (P. erinaceus, P. santalinus, and P. tinctorius) are listed as endangered and protected under Appendix II of CITES, and the status of several Pterocarpus species suggests that more will find a place on CITES in the future. As unsustainable forest exploitation has increased, regulations for timber traceability have also increased with the creation of such laws as the 2005 Lacey Act in the United States (Lacey Act, 2005) and the European Union Timber Regulation (EUTR) in 2013. These laws were implemented to ensure that members of the timber trade operated in accordance with guidelines and practiced due diligence, with the goal of halting illegal timber imports (FAO, 2016). Unfortunately, the illegal timber trade remains prevalent and has progressed into the third largest transnational crime (Mavrellis, 2017). To combat the prevalence of illegal timber, researchers have utilized Direct Analysis in Real Time Time-of-Flight Mass Spectrometry (DART-TOFMS). With the success found using DART-TOFMS for species identification, we investigated whether the method could be used to identify the original geographic region of timber through analysis of 211 samples taken from 12 Pterocarpus species taken from the Neotropics, Africa, South Asia, and Southeast Asia. We found that analysis using DART-TOFMS could identify the broad geographical provenances of the timber with an accuracy of 98%. This research demonstrated that DART-TOFMS can be used to detect the phytochemical trends that exist between timber species occupying broad geographic regions.

Protecting forests or saving trees? The EU's regulatory approach to global deforestation

AbstractGiven the poor problem‐solving effectiveness of international environmental law and a decline in multilateralism, unilateral approaches to halting deforestation globally have acquired increasing significance. Within this context, the European Union (EU) has adopted the EU Timber Regulation and the first and second Renewable Energy Directive, all of which have extraterritorial implications. Given continuing high rates of deforestation, the European Union has also been assessing which mix of instruments might prove more effective in preventing global deforestation. This article contextualizes these regulatory endeavours, analyses the specific interactions and features of existing instruments under EU law, such as due diligence obligations, sustainability criteria, certification schemes and bilateral agreements, and discusses the challenges arising from World Trade Organization (WTO) law regarding potentially more effective mandatory instruments. It finds that while the existing framework contains promising pathways for future regulation, designing sustainability criteria that are technically meaningful and also feasible from the perspective of WTO law requires greater policy coherence.

FSC sustainability certification as green-lane for legality verification under the EUTR? Changes and policy learning at the interplay of private governance and public policy

How do policy-oriented learning and shifting coalitions among private and public actors affect the evolution of the regulatory governance of legal and sustainable global timber commodity production and trade? To answer this question, we study the interplay between the transnational private regulation of sustainable forestry certification under the Forest Stewardship Council (FSC) scheme and the public policy requesting due diligence to prove the legality of global timber trade under the EU Timber Regulation (EUTR). We show that strategic policy-oriented learning and shifting coalitions among NGOs, business companies and state regulators were key shapers in the evolution and interplay of private and public regulations in the forest sector. In particular, environmental NGOs (ENGOs) and some forest-based industries first developed the non-state, market-driven FSC forest certification through a strategic alliance triggered by strategic policy learning about the failures and limitations of global state-based regulatory instruments. Following policy controversies about the eroding legitimacy and the ineffectiveness of FSC certification ENGOs, state regulators and other forest industries responded to these concerns and built a new strategic alliance to design and enforce regulatory bans and due diligence rules under the EUTR. Due to these controversies, shifting coalitions and strategic learning, private certification was not recognized as a green-lane to prove legality assurance under the EUTR. Nevertheless, FSC certification has been included, developed and practiced as part of the due diligence systems under the EUTR. In terms of theory development, our results show that strategic policy learning and processes of making and breaking strategic alliances were based on changes in core empirical beliefs based on evidence and information. However, these changes did not involve changes in core normative beliefs, which acted as main cognitive filters for breaking old strategic alliances and making new ones. These essentially cognitive mechanisms explain much of the evolution in regulatory governance interactions in the forest sector, shifting from public to private, then from private to public, and finally ending up in public-private controversies and adaptations.

Cutting Deals: Transnational Advocacy Networks and the European Union Timber Regulation at the Eastern Border

ABSTRACT The European Union’s (EU) Green Deal gives increased attention to the sustainability of international product cycles by implementing ‘due diligence’ requirements. We examine the difficulties in the implementation of the European Union Timber Regulation (EUTR) in two countries with weak management capacities such as Romania and Ukraine. We find that domestic and transnational civil society actors can support the implementation of due diligence requirements mainly by challenging the dominant position of private and state actors engaged in cutting deals with the EU-based wood industry, as well as contributing to increasing politicisation, raising awareness and public mobilisation.

Genome skimming reveals novel plastid markers for the molecular identification of illegally logged African timber species.

Tropical forests represent vast carbon stocks and continue to be key carbon sinks and buffer climate changes. The international policy constructed several mechanisms aiming at conservation and sustainable use of these forests. Illegal logging is an important threat of forests, especially in the tropics. Several laws and regulations have been set up to combat illegal timber trade. Despite significant enforcement efforts of these regulations, illegal logging continues to be a serious problem and impacts for the functioning of the forest ecosystem and global biodiversity in the tropics. Microscopic analysis of wood samples and the use of conventional plant DNA barcodes often do not allow to distinguish closely-related species. The use of novel molecular technologies could make an important contribution for the identification of tree species. In this study, we used high-throughput sequencing technologies and bioinformatics tools to obtain the complete de-novo chloroplast genome of 62 commercial African timber species using the genome skimming method. Then, we performed a comparative genomic analysis that revealed new candidate genetic regions for the discrimination of closely-related species. We concluded that genome skimming is a promising method for the development of plant genetic markers to combat illegal logging activities supporting CITES, FLEGT and the EU Timber Regulation.

Impacts of the FLEGT Action Plan and the EU Timber Regulation on EU Trade in Timber Product

The EU Timber Regulation (EUTR) is a key element in the efforts of the European Union to curb the trade in illegal timber products. This study helps to remedy the lack of systematic, statistical analysis of the EUTR’s potential impacts on international trade in timber products. Using cointegration intervention—or shock—models we quantify potential shifts in import prices and quantities of tropical hardwood lumber and oak lumber after the entry into effect of the EUTR. We further estimate import demand models to assess the relation between temperate and tropical hardwood products and whether there was a structural change in demand elasticities after the entry into force of the EUTR. The shock model analysis indicates, for most of the bilateral trade flows where we observe cointegration and a significant shock variable, increasing import prices and decreasing import quantities of tropical hardwood lumber following the EUTR start date, consistent with a contraction of the supply of tropical timber. The results of the import demand models do not give a clear indication as to whether oak lumber is a complementary or substitute product for tropical hardwood lumber, and there are no clear signs of structural changes in demand elasticities. Aside from the analysis, an important contribution of the paper is the procedure for building a long and homogeneous time series of tropical hardwood lumber.

Eighty-six EU policy options for reducing imported deforestation

Eighty-six EU policy options for reducing imported deforestation

Legality requirements for wood import in the EU: Who wins, who loses?

This paper presents a spatial equilibrium model to analyses the leverage impact of the legality requirements in the EU Timber Regulation (EUTR). The EUTR is part of the EU's Forest Law Enforcement, Governance and Trade (FLEGT) program, which aims to stimulate legal wood production and sustainable forest management at global level. This leverage effect is an argument in favor of FLEGT but it has never been investigated thoroughly, nor simultaneously for demand and supply. The leverage effect is measured in terms of the market share of legal wood (i.e. accompanied by a license which approves its legality) in total wood production. Our research finds that FLEGT does not increase legal wood production and consumption. FLEGT creates a non-tariff trade barrier at the non-tropical regions' conventional wood markets. This situation allows conventional wood producers to benefit from monopoly rents. The presence of transport costs prevents consumers to switch to foreign producers. In addition, producers in tropical regions cannot compete with the more efficient producers in the non-tropical regions on the certified market. As such, FLEGT curtails part of the international trade flows which decrease the global quasi-welfare, with especially consumers being hit. To tackle those issues, non-compliant producer should be assisted in reaching the legality requirements to turn FLEGT into a fully inclusive policy. In addition, consumers should be engaged to pay a price premium to compensate the additional costs related to legal wood production.

Transparency Index of the Supplying Countries’ Institutions and Tree Cover Loss: Determining Factors of EU Timber Imports?

Illegal logging and the associated deforestation have serious consequences for biodiversity, the climate, the economy and society. The EU Timber Regulation (EUTR) prohibits the placing of illegally harvested timber or timber products on the market. The objective of this paper is to analyse the recent evolution of EU imports of these products from the international market, in order to check how the transparency index of the supplying countries’ institutions and tree cover loss have influenced this trajectory. To that end, a panel data model is estimated with 228 observations from 38 exporting countries between 2012 and 2017. The results show that EU timber imports have a direct association with the transparency index and an inverse relationship with tree cover loss; both these relationships are highly significant at the one-percent level. Other significant factors are the performance of the EU construction sector (as a proxy for timber demand) and timber supply. In the short and medium-term, Voluntary Partnership Agreements (VPAs) signed between the EU and non-EU timber-producing countries have a negative influence on the supply to EU member states. This study presents an analysis of EU timber imports after the implementation of the EUTR, providing specific conclusions that can inform policymakers’ efforts to foster sustainable forest management.

European Union’s proxy accountability for tropical deforestation

ABSTRACT Consuming countries are increasingly holding transnational businesses accountable for environmental damage on behalf of affected communities in exporting countries. The EU Renewable Energy Directives (RED) and the EU Timber Regulation (EUTR) particularly demonstrate such an accountability-by-proxy. Both aim to prevent worldwide deforestation. However, their design and accountability logics vary considerably. Using the case of Indonesia, the article addresses the question of whether a certain accountability relationship matters for improving outcomes such as prevention of tropical deforestation. Hereby, the article contributes to a new theoretical understanding of how logics of proxy accountability are linked to narratives about agency and what inherent normative risks are. The article shows that, different from the EUTR narrative, which reaffirms standard accountability arrangements, RED presents a hybrid approach. This hybrid approach may more effectively prevent tropical deforestation, but it comes at the price of further marginalization of directly affected communities.