Thai exporters gear up for EU deforestation regulation impact
Thai exporters to the European Union need to prepare for compliance with the European Union Deforestation Regulation (EUDR), scheduled to take effect on 30 December 2024. This regulation targets seven categories of commodities, including palm oil, rubber, wood, coffee, cocoa, cows, and soy, encompassing not only raw materials but also consumer and processed products containing these ingredients.
Kees Bronk, an EU sustainability law expert, cautioned Thai lifestyle product exporters to expedite their understanding of the EUDR measures, which will be enforced across all 27 EU member states. While the law is not directly enforced in Thailand, it will impact importers, wholesalers, and retailers within the EU. Enforcement will begin with large operators this year, allowing smaller businesses the time needed to adjust until the middle of the following year.
Bronk emphasized the necessity for Thai exporters to swiftly adapt to maintain trade relations with the EU market. Speaking at a recent webinar during STYLE Bangkok 2024, organized by the Department of International Trade Promotion, Ministry of Commerce, he advised exporters to meticulously study their products to ensure traceability and provide evidence of deforestation-free practices. Compliance involves preparing reports according to standard criteria and ensuring all parties in their supply chains comply with EUDR regulations.
The essence of EUDR revolves around three key points: deforestation-free, production in accordance with the relevant legislation of the country of production, and covered by due diligence statement as mandated by the EU.
Conducting Due Diligence comprises three main steps: gathering information throughout the supply chain, assessing risks related to deforestation and environmental, social, and governance (ESG) issues, and implementing mitigation measures when risks are identified, such as creating additional documentation and taking steps to reduce risks.
Businesses can prepare for EUDR compliance by initiating the preparation of sustainability reports for their organizations, educating supply chain partners on data collection and submission, and communicating the true value and practices of their products to prevent greenwashing. Additionally, practice of eco-design by considering the end of a cycle in mind can appeal to environmentally-conscious consumers, particularly the new generation, who often vote with their wallets.
