Even as Europeans continue to struggle with inflation, EU bureaucracy may soon make some everyday consumer goods—such as coffee, chocolate, and even wooden picture frames—more expensive.
Part of the Green Deal, the new EU directive on deforestation-free supply chains went into force in June 2023, with an 18-month transition period before its detailed rules fully apply. The binding rule lists cattle, cocoa, coffee, oil palm, rubber, soy, and wood as raw materials that need to come from supply chains that do not contribute to deforestation or damage to forests, whether those trees are inside or outside of the EU. The items listed were chosen because the Commission estimates that these materials account for the largest share of deforestation caused by the European Union. Naturally, the rule also applies to anything made from these materials.
The rule defines deforestation-free raw materials as coming from areas that were not deforested after December 31, 2020. In addition, the products must also come with due diligence certification showing that their producers followed the country of origin’s domestic laws, such as environmental and work-related regulations.
Soybeans and coffee should now arrive in a container accompanied by documentation proving that they were not grown in places where forest had existed since the end of 2020. Absurdly, this process includes providing the GPS data of the area where the substances were cultivated and the date of production.
EU consumers—who have not asked for this—can now rest easy in the knowledge that the EU knows exactly where their coffee and tofu have come from, and that it was not a recently cut down forest. Apollo News reports that the German Coffee Association has warned of a coffee shortage in Europe by 2025, with any incoming coffee selling at significantly higher prices. Many producers of soy and coffee may not be able to import to the EU any longer or may simply decide to send their products elsewhere. According to Apollo, EU farmers—who rely on imported soy for animal feed—have also criticized the legislation.
But the biggest impact on Europeans may have the least impact on forests. Since the rule applies to anything made from wood, it affects a wide range of products from toothpicks to picture frames, furniture, and wooden houses. However, wood accounts for only 8.6% of deforestation, according to the commissions’ own calculations. A bigger contributor to deforestation is palm oil, regularly used in supposedly green biofuel. Apollo reports that in 2016, 41% of palm oil imports in Germany went into biodiesel, although in 2018 the EU put rules in place to cut back palm oil in biodiesel to zero by 2030.
Unilateral EU rules designed to control strictly ‘forest-friendly’ supply chains will likely impact the bloc’s global competitiveness more than it impacts deforestation—and increase prices for consumers.
