New regulations on wood product imports into the European Union (EU) could significantly disrupt or even halt the trade of softwood and hardwood lumber, as well as panels, with foreign suppliers.
The EU Deforestation Regulation (EUDR), enacted in December 2022 and implemented in June 2023, will begin enforcement on December 30, 2024. These laws affect EU imports of wood products, cattle, cocoa, coffee, palm oil, rubber, and soy.
Under the new rules, exporters of lumber and panels must demonstrate that their products come from logs harvested from land free from deforestation. The regulations define deforestation and forest degradation as the conversion of forest land to agricultural use. Additionally, forest degradation is described as a significant alteration of forest structure or the conversion of a naturally regenerating forest into a planted one.
Exporters will also need to provide evidence that all products comply with the supplying country’s laws on land use, environmental protection, labor rights, and other relevant factors. Furthermore, shippers must submit due diligence statements that specify the exact location where the wood was harvested, using geolocation coordinates with a precision of at least six decimal places. The documentation must also include details on the tree species and the date or time range of the harvest.
Risk of storage fees for exports
EU customs will withhold lumber or panel imports from entering the market if the necessary documentation is incomplete. Exporters who fail to provide the required information risk incurring storage fees, having their products returned, and potentially facing other penalties.
The European Timber Trade Federation advised many exporters in a memo last June to start gathering the required information immediately, warning, “Without this information, you will no longer be able to export wood products to the EU after December 30.”
Trade organizations in the US and Canada, such as the Southern Forest Products Association, the American Hardwood Export Council, the USDA, Natural Resources Canada, and the Quebec Wood Export Bureau, are currently negotiating on behalf of North American exporters to the EU.
A sales manager for a major Western Canadian producer noted in mid-July that most species exported by the company to Europe would not comply with the regulation as it is currently written. Species like Cedar and Hemlock, which often depend on old-growth forests, would be particularly affected, potentially leading to a ban on their shipment to the EU.
Southern Pine exporters have also voiced concerns that the regulations could disqualify all Southern Yellow Pine (SYP) suppliers who source logs from small-acreage stands or “gate wood.” One experienced SYP exporter predicted that many companies would cease exporting to the EU and instead focus on larger markets in the Middle East, North Africa, and Asia if the regulations remain unchanged.
In May, US trade officials sent a letter to the EU Commission, urging a delay in the EUDR’s enforcement until “substantial challenges” are addressed, citing the difficulties US exporters face in preparing for the new regulations.
