EU forces extension of conformity work to the wood sector

The Swiss Packaging Institute SVI, in cooperation with the Association of the Swiss Wood Packaging and Pallet Industry VHPI, held a webinar on November 14, 2024 on the topic of “EUDR: The impact of the Deforestation Regulation on the Swiss packaging industry”. Andreas Zopfi, Managing Director of both the SVI and the VHPI, welcomed 21 participants to the webinar on this highly complex topic. The only speaker was Tobias Stäuble, Project Manager at Global Traceability Solutions GTS, based in Munich. GTS is a service company specializing in traceability in the wood sector. The main content of the webinar was the background and requirements of the EUDR, explanations of the affected products as well as the affected actors and their obligations, and information on implementation in practice, introduction and transition scenarios as well as controls and sanctions. The background to the EU’s new regulation is that there is still an annual loss of forest worldwide and, from the EU’s point of view, previous measures have not brought the hoped-for success. The new EU Deforestation Regulation (EUDR) replaces the previous EU Timber Regulation (EUTR). According to the requirements of the EUDR, relevant raw materials and relevant products must above all be deforestation-free (Article 3a), legally produced (Article 3b) and covered by a due diligence declaration (Article 3c). In addition, there are further requirements (Article 12) and traceability serves as a criterion for risk assessment (Article 10). What is new about the regulation is that products that are legal in their country of origin can also become illegal when delivered to the EU. In order to legally import products into the EU, a risk assessment must therefore be carried out. In particular, it must be clarified what was cultivated on the land before the reference year 2020 and whether there has been any degradation since then. The main challenges in determining the reference status lie in the fact that there is no officially recognized basic data set in certain countries and contradictions in existing data sets. There is a lack of differentiation between forest classes in reference data as well as false-positive and false-negative forest classifications in existing data sets. Another general difficulty is the lack of consistency between the EUDR definitions and the land use designations of the producing countries. The post-harvest deforestation risk assessment also forces stakeholders to make a prediction for the future. There are major uncertainties in the identification and assessment of forest degradation risk as well as high costs. Stäuble commented that the EU urgently needs better clarification on legal liability for forecasts. Traceability in particular is an important part of risk assessment. Once the data collection and assessment has been completed, a so-called “due diligence declaration” can be submitted. It must be created via the EUDR Due Diligence Registry (part of the EU Traces platform). The indication of a valid reference number for the due diligence declaration becomes part of the customs declaration. Without a due diligence declaration, the goods will no longer be released at customs in future.

The due diligence declaration with all GPS data and quantities must be based on an appropriate risk assessment. Basically, this is a declaration of conformity. For this purpose, all countries in the world are divided into “low risk” and “high risk” groups. There will be a simplified due diligence declaration for the “low risk” country group. What is new is that at a meeting of the EU Parliament on November 13, it was decided to create a new “no-risk” group. It is not yet clear whether and to what extent the due diligence declaration can be extremely simplified for this group or whether it can be dispensed with completely. Switzerland would then probably be included in this new “no-risk” group. It is important to note that the entire supply chain is involved. The customs tariff numbers are particularly important for imports. All stakeholders are affected when a product or parts of a product enter the EU. Whoever brings the goods into circulation in the EU must first clarify who is responsible. The entire process of risk assessment and the due diligence declaration involves a great deal of bureaucracy, as all data must be collected by the creator of the due diligence declaration. Although reference can be made to this in the subsequent supply chain, all companies in the supply chain remain individually liable. With regard to the packaging industry, it has not yet been conclusively clarified which products are affected. According to the current status of the draft regulation, packaging is only within the scope of the EUDR if it is placed on the market under a relevant customs tariff number (Annex I EUDR) or was produced from a relevant raw material. Recycled material and bamboo etc. are excluded. Packaging that is not yet in use, i.e. filled with the product, is also excluded. The return of used empty pallets is also excluded according to the current status (see FAQ V3, 2.6, 2.7). For Switzerland and Swiss companies as non-EU operators, the following perspective arises: If customs declarations are made themselves, they must also submit their own due diligence declarations. If the material that is delivered to the EU has already been exported from the EU in the upstream supply chain, a reference to a previous declaration must be available. If the material that was not previously in the EU originates from countries that have not been classified as “low-risk” by the EU, full compliance documentation is required. Further simplifications have been announced for material from “no-risk” countries, but these have not yet been fully outlined. Global Traceability Solutions has developed the “GTS Radix Tree” tool for companies to implement the EUDR. At the end of the webinar, participants had the opportunity to ask questions, which the speaker answered. In particular, the postponement by one year that has now been decided in the EU Parliament gives the possibility that the draft will be revised again in the expert commission. In his closing remarks, Andreas Zopfi therefore announced that the SVI and VHPI will hold a follow-up and in-depth webinar on the topic of EUDR if there is interest.