Brazil’s paper and pulp industry is preparing for the implementation of the European Union’s deforestation-free products regulation (EUDR), which is set to take effect at the end of 2025. The industry, led by the Brazilian Tree Industry (Ibá), asserts that the regulation will not significantly disrupt operations, highlighting that many companies have been tracing their supply chains comprehensively for over two decades and do not source from illegally deforested areas.
The EUDR mandates that suppliers must demonstrate that the products they export to the EU are not linked to illegal deforestation. In Brazil, experts anticipate that this legislation will contribute to curbing illegal deforestation in the Amazon rainforest. Ibá reports that the regulation will necessitate investment in blockchain and other technological solutions, which could escalate production costs by as much as $230 per ton of pulp.
Speaking to Mongabay, Ibá commented, “Although for Ibá’s members the [EUDR] adjustments have not changed their business model, nevertheless they have demanded and will continue to demand higher production costs.” The anticipated cost increase is based on estimates from RISI Fastmarkets, varying between $40 and $230 per ton depending on the complexity of the supply chain.
Originally scheduled to be enforced this month, the EUDR has been postponed to allow for a smoother implementation. This delay has garnered mixed responses from industry stakeholders and experts alike. While Ibá has welcomed the postponement as an opportunity to address inconsistencies within the regulation that require further engagement from the EU Commission, others express concern over the ongoing threat of deforestation during the additional wait period.
Brazil exports approximately 4.4 million tons of pulp to the EU annually, serving as a vital supply for the tissue paper market and more. The sector's commercial agricultural activities cover an area of 10.2 million hectares (25 million acres), with new trees planted at a rate of 1.8 million daily. Additionally, the industry maintains 6.9 million hectares (17 million acres) of native forest, aiding in carbon sequestration and combating climate change.
According to Ibá, commercial plantations are established on previously utilised lands, such as low-productivity pastures. Compliance with local and international laws is ensured through annual third-party audits within frameworks established by international forestry certifications such as FSC and PEFC.
For Ibá, the EUDR promotes greater transparency within the sector. The association emphasises that its members have long been able to trace wood from the source to the final product, an improvement that could be fully realised post-investment to meet EUDR specific requirements.
In particular, companies like Suzano Papel e Celulose, one of the world's leading pulp and paper manufacturers, are aligning their operational practices with the EUDR. Suzano confirmed that its practices have already adhered to stringent forest management standards for years, emphasising that plantations are established exclusively in areas previously altered for other uses, and no wood from deforested regions is utilised since July 2020, which aligns closely with the EUDR’s cut-off date of December 2020.
Suzano has outlined robust traceability measures within its production processes, which utilise advanced systems tracing raw materials from their origin to the end product. The company is currently enhancing its internal processes to meet the additional data processing and documentation compliance demands of the EUDR. This includes the development of a proprietary blockchain system aimed at improving the retrieval of compliance data and raw material origins.
While the EUDR is seen as an opportunity for establishing standards for sustainable production, critiques surfaced regarding the timing of its postponement. Paulo Barreto, a senior researcher at conservation nonprofit Imazon, believes that Brazil’s lack of stringent deforestation controls has led to its classification as a high-risk country under the EUDR. He stated that external measures are essential to combat illegal deforestation.
Tina Schneider, director for forest governance and policy at the World Resources Institute, initially opposed the EUDR's delay but acknowledged the need for comprehensive changes. She noted that businesses should consider compliance with the EUDR as part of their operational expenses, warning that mixed understandings of deforestation legality could complicate regulatory adherence.
The backdrop of this regulatory development illustrates an evolving landscape where sustainable practices in the paper and pulp sector are increasingly critical, with the momentum of global sustainability efforts influencing business operations and environmental stewardship.
Source: Noah Wire Services