Essential review of the forest and soil protection legislation is getting sharp outline

Late 2021 brought several new developments for the forestry and agriculture industry, which will also represent the main topics in the months to come. First and foremost, the European Commission’s proposal for a regulation that aims to integrate sustainability conditions into placing timber and selected agricultural commodities on the EU market. The adoption of the new EU Soil Strategy for 2030, which takes into account the potential and essential benefits of soil, also forms a part of the new comprehensive environmental solutions. Following the debate on offset projects, the OECD working paper titled ‘A global analysis of the cost-efficiency of forest carbon sequestration’ provides an interesting perspective.

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Revolution in placing timber and selected agricultural commodities on the EU market

On 17 November 2021, the European Commission issued a Proposal for a Regulation on the supply to and export from the EU market of selected commodities and products associated with deforestation and forest degradation. This proposal aims to reduce the EU’s contribution to global deforestation and forest degradation. The regulation is intended to set sustainability conditions for placing timber and selected agricultural commodities on the European market whose production entails the most significant impact on deforestation and forest degradation. These commodities include cattle, cocoa, coffee, palm oil, soya and timber, as well as products from these commodities. The proposal thus fundamentally changes the approach and rules for placing timber on the market, as the existing conditions of legality of logging have been extended to include requirements for the sustainable use of forest resources; moreover, timber should be subject to the same regime as other risk commodities and products.

The selected commodities and products that are placed or supplied on the EU market must meet three basic requirements: they are not associated with deforestation; they have been acquired in accordance with the relevant legislation of the country of production; and they are covered by a due diligence system. The selected commodities and products must not come from production on soil which was deforested after 31 December 2020. For timber itself, the condition in place establishes that it must not come from logging that caused forest degradation after 31 December 2020. With regard to international trade law and World Trade Organisation law, these duties will also apply to the export of these commodities and products from the EU.

The cornerstone of the regulation is a due diligence system that must be carried out by each entity prior to placing commodities and products on the European market or exporting them outside the EU, and by the trader prior to supplying them to the EU market. Large entities are also required to have their due diligence system independently audited. FLEGT-licensed timber products should automatically comply with only one of the requirements: they have been produced in accordance with the legislation of the country of production.

This European Commission’s legislative proposal builds on earlier efforts to reduce the EU’s contribution to deforestation and forest degradation in the world and draws in particular on the experience of the EUTR and FLEGT implementation. The extension of the system to include sustainability elements and a range of commodities represents a fundamental change, the success of which will be determined by setting detailed rules and the degree of enforcement of the due diligence system in the individual Member States.

How to make the most of the soil’s potential?

Another important pillar of the strategic approach to nature and landscape protection at EU level is represented by the EU Soil Strategy for 2030: Reaping the benefits of healthy soils for people, food, nature and climate (COM (2021) 699 final), presented by the European Commission on 17 November 2021.

The long-awaited adoption of this strategy is a recognition of the importance of soil, which is home to more than 25% of all biodiversity, serves as a filter for drinking water for nearly 10 billion people and is the largest terrestrial carbon sink. Soil is also important for meeting long-term economic goals, essential for food chains, and a source of food, biomass, fibre and raw materials. The Strategy presents a new vision in response to the current situation where, despite the undisputed importance of soils, 60 to 70% of soils in the EU are unhealthy and subject to degradation, unsustainable use and land take.

The main objective of the Strategy is to reverse this situation and ensure that all soil ecosystems in the EU are healthy by 2050, including the achievement of zero net land take. This will fully exploit the potential of soils, which will have a positive impact on achieving climate neutrality, climate change resilience, the development of the bio-economy and biodiversity protection. These results are to be achieved by setting medium-term targets by 2030 in other related areas, including combating desertification, restoring degraded major ecosystems and reducing nutrient loss or pesticide use.

Thus, through this EU Strategy, soil protection is given due attention and can serve as a springboard for the development of efficient and comprehensive soil protection management at national, European and potentially global level.

Protecting forests as an effective way to sequester carbon

The carbon sequestration capacity of forests has come to the fore following the setting of global emission reduction targets under the Framework Convention on Climate Change and the Paris Agreement. As this is a natural capacity of forests, the potential cost-efficiency of this kind of carbon removal is often discussed in this regard. Basic aspects of cost-efficiency and the identification of geographical locations for efficient carbon sequestration are presented in an OECD working paper titled A global analysis of the cost-efficiency of forest carbon sequestration.

The conclusions show that forest protection is the most cost-effective way which also entails environmental and additional social benefits. In this respect, reforestation has also proved to be more cost-effective than afforestation, as it is distinguished by major additional benefits. Afforestation is, by contrast, the least effective forestry measure. The conclusions showed large differences in cost-efficiency when considering environmental and additional social benefits, and it is therefore necessary to understand forest functions comprehensively. Geographically, it is interesting to note that the most cost-effective areas include not only tropical forest areas but also countries in Eastern Europe, Ireland or the United Kingdom.

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