Implications of the EU Deforestation Regulation on Global Palm Oil Supply Chains
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2024
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Fayezi, S.
Varkkey, H.
Bayancela Briones, S.
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Sajad Fayezi, Helena Varkkey, Stephanie Bayancela Briones
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The EUDR aims to mitigate deforestation risks by requiring supply chain actors to submit geospatial data and conduct rigorous risk assessments. Our latest working paper identifies significant challenges, particularly for palm oil suppliers. The stringent traceability and compliance demands of the EUDR could disproportionately impact smallholders who may lack the necessary resources. This regulation echoes previous market access tensions from the EU Renewable Energy Directive (RED) II, with major producers like Indonesia and Malaysia raising concerns. Opportunities are seen through alignment with existing certification schemes such as Malaysia's MSPO, which could facilitate EU recognition. The EUDR's classification of countries by deforestation risk simplifies compliance for low-risk nations, encouraging proactive engagement with the EU for precise risk evaluations. The authors emphasize the pivotal role of the Council for Palm Oil Producing Countries (CPOPC) in promoting dialogue and cooperation with the EU, advocating for the interests of producer nations. As the EUDR is implemented, extending timeframes, addressing smallholder challenges, and establishing support mechanisms are crucial. The paper highlights the importance of collaboration and leveraging local initiatives for a successful transition to deforestation-free trade.
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This work is licensed under Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.