EU’s new anti-deforestation penalties target paper industry in environmental and human rights fight

01 May 2023 --- The European Commission (EC) has passed a new law obliging all companies using wood-based materials to prove their supplies have not come from deforested land or areas where human rights violations have occurred. Selling products in the EU will now require a due diligence certification proving the provenance of paper and card-based materials.

The law adds to mounting legislation in the EU and other global regions against greenwashing, which has become an increasing concern amid the packaging industry’s shift from plastic to fiber-based materials. Innova Market Insights listed “Green but clean” as a top packaging trend for 2023, noting that consumers want environmentally sustainable products but are wary of being misled. 

The EC says it will task competent authorities to background check the chain of custody for all products traded with the EU using geolocation coordinates, satellite monitoring tools and DNA analysis. Penalties for non-compliance will include fines of at least 4% of the total annual turnover in the EU of the non-compliant operator or trader.

Christophe Hansen, rapporteur from the European People’s Party, remarks: “Until today, our supermarket shelves have all too often been filled with products covered in the ashes of burned-down rainforests and irreversibly destroyed ecosystems and which had wiped out the livelihoods of indigenous people.”

“I am relieved that European consumers can now rest assured that they will no longer be unwittingly complicit in deforestation. The new law is not only key in our fight against climate change and biodiversity loss but should also break the deadlock preventing us from deepening trade relations with countries that share our environmental values and ambitions.”

Environmentalists are pleased that the law is being enforced but there are concerns it could adversely impact small businesses.Paper problems, industry answers 
While fiber-based giants such as DS Smith are capitalizing on anti-plastics legislation sweeping the globe, such as the EU Single Use Plastic Directive and the ongoing negotiations for a UN treaty against plastic pollution, critics are drawing attention to the severe environmental footprint of the paper industry. 

Last year, forest conservation organization Canopy said that plantation forestry can cause an even greater amount of greenhouse gas emissions than the fossil fuel industry. 

A DS Smith spokesperson tells PackagingInsights the company has already implemented a strict chain of custody measures to ensure against deforestation. 

“The quality and the sustainability of our core raw material, fiber, are crucial to our operation, which is why we responsibly source 100% of our fibers to combat deforestation using only recycled or chain-of-custody certified papers,” they say. 

DS Smith’s “Now and Next strategy” includes a commitment to protect forests and biodiversity in all its resources by 2025. 

“In some countries and regions, there are still issues with deforestation, illegal logging, irresponsible plantation development, loss of high conservation areas, habitat loss and other environmental or social impacts but our customers are publicly committed to zero deforestation,” says the spokesperson. 

“Using the chain of custody system, we check that the origin of the material is registered as having been managed in a way that meets sustainable forest standards.” 

Supply chain traceability
The EC will classify countries or areas as low-, standard- or high-risk based on an “objective and transparent assessment” within 18 months of the regulation entering into force. Products from low-risk countries will be subject to a simplified due diligence procedure. 

The proportion of checks is performed on operators according to the country’s risk level: 9% for high-risk countries, 3% for standard risk, and 1% for low-risk. 

Strengthening chain of custody certifications will be key for packaging industry stakeholders to avoid penalty fines and using advanced technologies – such as drones, geographic information systems and plant science technology – will be key to ensuring adequate traceability. 

Canadian reforestation company Flash Forest specializes in providing such technologies to the industry. Bryce Jones, the company’s CEO and co-founder, says the law is a “big and overdue step in the right direction.”

However, Jones also raises concerns over enforcement, saying that some industry players may not comply with the regulation. 

“The current deforestation practices are unsustainable, particularly of primary and irreplaceable forests. That means it's only a matter of time before these practices are phased out,” he says.

“We can phase them out now and protect the remaining biodiversity that we have today and save one of the best mechanisms we have at mitigating the climate crisis, or we can let market forces take out the last of these forests naturally, at which time, we'll have no choice but to find alternatives.” 

Recently, carbon solutions provider ReSeed warned that the new rules requiring farms to be mapped by GPS coordinates would financially burden small-scale companies and could potentially exclude them from international supply chains. 

By Louis Gore-Langton