TAG: GS- 2: IR & GS- 3: ECOLOGY AND ENVIRONMENT
CONTEXT: The European Union has decided to extend the deadline for compliance with the EU Deforestation Regulation (EUDR), giving Indian coffee and rubber producers additional time to adapt to the new requirements. The decision is significant for India’s plantation sector, especially coffee and rubber, which are important export commodities to the EU.
EXPLANATION:
About European Union Deforestation Regulation (EUDR):
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- It was to be introduced in December 2024. The EU Forest Destruction Regulation (EUDR) aims to prevent imports of agricultural products linked to deforestation and mandates compliance from producers, exporters and traders. Micro and small producers must meet the standards by June 30, 2026.
- It has been introduced to limit the impact of the EU market on global deforestation/forest degradation and biodiversity loss, promote deforestation-free supply chains, reduce the EU’s contribution to greenhouse gases (GHG) emissions, and protect human rights and the rights of indigenous peoples.
- Under the EUDR, certain products for export to the European Union (EU) will have to meet new rules relating to the land on which they were produced.
- Commodities targeted by the EUDR are: –Coffee, Cattle (including beef), Wood, Cocoa, Oil Palm, Rubber
- It also extends to a range of relevant products derived from these commodities, such as leather, chocolate, and paper.
- Exporters will need to prove that these goods/products do not originate from land where forests haven’t been cut since Jan. 1, 2021, regardless of whether the deforestation was legal in the countries of origin.
- They will need to provide clear evidence to EU operators and EU traders to support this.
- Small businesses further down the supply chain are subject to the same obligations and retain legal responsibility if regulations are violated.
- But they are not liable for due diligence for parts of their products that were already subject to review.
- Failure to comply can result in financial penalties and restricted access to the EU market.
Country Benchmarking:
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- The EUDR will also have a country benchmarking system. This will determine the deforestation and degradation risk of each nation.
- Nations will be classed on a 3-tier system, from low-risk to high-risk.
- A nation’s risk classification will establish the level of scrutiny by the EU. This includes the proportion of consignments inspected by the relevant authorities.
Relevance to Indian Coffee Industry:
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- Indian coffee is unique as it is often cultivated under a two-tier canopy of native shade trees, which supports biodiversity. Despite this sustainable practice, the new EU regulations still require Indian planters to adhere strictly to EUDR standards.
- Over 70% of Indian coffee exports go to EU countries, making EUDR compliance crucial for Indian growers.
Rubber Sector’s Response to EUDR Extension:
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- The extension of the EUDR deadline is expected to stabilize the international rubber market in the short term, the postponement has temporarily eased market concerns.
- The rubber sector now has until 2026 to prepare for compliance, providing time to implement necessary changes.
- The Rubber Board of India has partnered with Hyderabad-based tech firm TRST01 to facilitate compliance. They plan to issue due diligence certificates to exporters, starting with select regions in Kerala.
- India ranks 4th in global natural rubber production, with 81% of its output from Kerala and Tamil Nadu.
Source:
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