The U.S. paper and pulp industry is actively lobbying the Trump administration to engage with the European Union and secure a “deforestation-free” designation for the United States. This strategic move aims to simplify compliance with the EU’s upcoming environmental regulations, set to significantly impact global trade.
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The EU’s groundbreaking anti-deforestation policy, slated for enforcement in December, prohibits the import of commodities linked to forest destruction. This legislation has already been delayed by a year following strong objections from major trade partners, including Brazil, Indonesia, and the United States.
EU Deforestation Law Poses Challenges for US Exporters
Heidi Brock, CEO of the American Forest and Paper Association (AF&PA), voiced concerns about the regulation’s complexity and potential burdens on U.S. businesses. “A delay does not solve our concerns with the regulation’s complex requirements and significant technical barriers,” Brock stated, emphasizing the potential for “costly and unnecessary obligations” for U.S. companies. The AF&PA is advocating for the Trump administration to prioritize this issue in trade negotiations with the EU, seeking recognition of the U.S. as a responsible steward of its forest resources.
This push for a “deforestation-free” label exceeds the request by Trump’s Commerce Department nominee, Howard Lutnick, for a “low-risk” classification. While a “low-risk” designation would still necessitate due diligence and inspections, a “deforestation-free” status could potentially streamline compliance significantly. Currently, the EU policy categorizes countries as high, standard, or low risk, with the latter facing less stringent requirements. However, no category explicitly designates a country as entirely deforestation-free, despite previous attempts by EU lawmakers to incorporate such a provision. Modifying the existing EU law would require a formal proposal from the European Commission and subsequent approval from both EU lawmakers and member states.
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Navigating Complex Supply Chain Requirements
The EU’s ambitious legislation mandates that companies importing specific commodities, including cattle, cocoa, coffee, palm oil, rubber, soy, and wood products, demonstrate that their supply chains are not contributing to deforestation. Non-compliance could result in substantial fines and import restrictions. The core objective is to curb European consumers’ contribution to global deforestation. Data from Global Witness reveals that deforestation linked to EU commodity imports generated at least 120 million metric tons of CO2 emissions in 2021-2022. U.S. forest product exports to the EU, valued at over $3.5 billion annually, underscore the significant economic stakes involved. The U.S. holds a prominent position as Europe’s primary supplier of specialty pulp used in essential products like diapers and menstrual products.
Traceability Challenges for US Pulp and Paper Mills
The AF&PA highlights the inherent difficulties U.S. pulp and paper mills face in meeting the EU’s stringent traceability requirements. The complex nature of the production process, involving multiple blending stages of wood materials from various sources, makes tracing individual wood chips back to their origin practically impossible. “The leftover materials from sawmills and forest residues our industry uses are regularly blended multiple times throughout the production process,” Brock explained. “This makes tracing each individual wood chip from the original forest plot of land to a final product effectively impossible.”
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In conclusion, the U.S. paper and pulp industry’s lobbying efforts reflect the significant challenges posed by the EU’s new deforestation regulations. Securing a “deforestation-free” designation for the U.S. is seen as crucial to ensuring continued access to the European market and mitigating potential economic disruption. The outcome of these negotiations will have substantial implications for both U.S. exporters and the broader global effort to combat deforestation.
