Know your wood – Sustainable Shipping

This article has been written in response to enquiries from members around the impact of the EU Deforestation Regulation (EUDR) on the carriage of cargo and use of dunnage. 

Potential impact on shipping 

Cargo ships regularly carry wood as cargo or to secure cargo (e.g. as dunnage). Consequently, large quantities of wood are transferred into and out of the EU each day. Wood may be discarded by Stevedores, require sorting by crew and be damaged whilst loading or discharging leaving debris. 

Owners, Charterers and others in the shipping value chain should take note of the EU commission’s advice on Trading and shipping which is extracted below for your ease.   

“Trading and shipping” 

Deforestation-free and legal commodities must be kept separate from other goods while being traded and shipped. Mixing compliant and non-compliant commodities or commodities of unknown origin is not allowed. In such cases, the whole shipment would be non-compliant and cannot be placed on the EU market.” 

The commercial consequences could be significant for those not complying with this requirement. 

EUDR in a nutshell 

(EUDR) came into force on 29 June 2023 and the provisions were to be applied from 30 December 2024. However, the Council agreed to the Commission’s proposal to postpone the application date of the regulation by one year.

Now, as also agreed by the European Parliament, the obligations stemming from this regulation will be binding from:

• 30 December 2025, for large operators and traders

• 30 June 2026, for micro- and small enterprises

This gives legal certainty, predictability and sufficient time for a smooth and effective implementation of the rules, including fully establishing due diligence systems covering all relevant commodities and products. These due diligence systems include identifying deforestation risks in supply chains as well as monitoring and reporting measures to prove compliance with EU rules.

Next steps

Parliament decided to refer this file back to committee for interinstitutional negotiations. In order for these changes to enter into force, the agreed text will have to be endorsed by both Council and Parliament and published in the EU Official Journal.

Please see link here.

The 7 commodities controlled by EUDR are listed below: 

What is Prohibited?  

The relevant commodities and products can’t be supplied to the EU market or exported from the EU unless they meet the following criteria:  

1. Deforestation-free*  

2. Relevant legislation in the country of production has been followed. 

3. Covered by due diligence statement.   

*Regulation sets a deforestation cut-off date of 31 December 2020 

EUDR interface with shipping & EU Commission feedback 

Let’s look at the description of traders and operators because they are the primary focus of EUDR.

Traders:  

Those in the supply chain, other than the operator, who make relevant products available on the market through a commercial activity. 

Operator 

Any natural or legal person who exports or places on the market relevant products during a commercial activity. 

Carriers – their exposure 

Whilst a carrier is instrumental to the supply chain they don’t place or supply these goods to EU market. 

EU Commission feedback 

To bring some certainty on who is caught by EUDR we enquired with the EU Commission and their feedback is summarised below: 

The commission is working on guidelines to elaborate on below points of the regulation before it comes into force, but they are not ready yet:  

• Definition of agricultural use 

• Issues related to agroforestry, agricultural land, legality and on other aspects that are of interest to many stakeholders on the ground. 

The commission also uses their muti-stakeholder platform to formulate relevant guidance in relation to Protecting and Restoring the World’s Forests. The Frequently Asked Questions found below were formed by frequent questions received by the Commission from relevant stakeholders and will be updated over time. If needed, additional facilitation tools will be mobilised. 

No additional guidelines are necessary to comply with the rules. The Commission aims to elaborate certain aspects to explain how the Regulation will work in practice, share best practice examples, etc. 

We advise you to visit the Frequently Asked Questions here.

And to contact your relevant national authorities following this link.

Find more info on EUDR here.