On 4 January 2024, the Environmental Audit Committee (EAC) published a report on the UK’s contribution to causing and to tackling global deforestation.

The UK’s contribution to deforestation

The EAC report cites a 2020 study by WWF and the RSPB which found that:

• the UK’s imports of seven ‘forest risk’ commodities (soy, cocoa, palm oil, beef and leather, paper, rubber and timber) account for a land footprint “equivalent to 88% of the UK’s land mass” each year, and 
• over 40% of this footprint takes place in countries with a “high, or very high, risk of deforestation, weak governance arrangements and poor labour standards.”

The UK’s contribution to tropical and sub-tropical deforestation is driven mainly by four main commodities: cattle, palm oil, industrial roundwood and soybeans. 

Addressing deforestation through due diligence 

To address this, the UK government is required to establish a due diligence regime for forest-risk commodities under the Environment Act 2021. Schedule 17 of the Act envisages a system that would prevent the use of a forest risk commodity in UK commercial activities unless it has been produced in compliance with relevant local laws. 

This narrow focus on ‘legality’ rather than a ‘zero-deforestation’ or ‘sustainability’ approach has been criticised as relying too heavily on exporting countries’ laws. The EAC recommends that Schedule 17 be amended to place “all deforestation activity” within the scope of the due diligence regime (rather than only deforestation which is illegal in the country of production). The trouble is that not all countries will have such laws in place or might repeal them if it gets in the way of exports.

During COP28 in December 2023, the government announced plans to introduce the Section 17 regime. Under the so called ‘Forest Risk Commodities Scheme’, in-scope businesses will need to carry out due diligence before buying certain commodities, comprising non-dairy cattle products, cocoa, palm and soy. 

In-scope businesses will be those which use these commodities in UK supply chains and have a global turnover of over £50 million a year, though an exemption will apply to businesses not using more than 500 tonnes of the relevant commodity per year. There will be a grace period for businesses to prepare for the implementation of the new requirements once the regulations enter into force – the length is not yet clear. Sanctions are expected to include unlimited monetary penalties for the most serious breaches. 

While the EAC welcomes this proposed scheme as a step towards addressing the UK’s deforestation footprint, they identify a number of shortfalls:

• No timetable has been set for publication of the secondary legislation that will be needed to implement the due diligence provisions – with the Department for Environment, Food and Rural Affairs indicating that such legislation will be laid before parliament “when parliamentary time allows”. 
• The EAC recommends that the legislation should from the outset also include maize, rubber and coffee. 
• Noting the direct and indirect contribution of the UK financial sector in financing deforestation, the EAC also recommends that the government legislate to bring companies in the financial sector into the regime.

The EU’s Approach

Meanwhile, the EU is ploughing ahead with its own Deforestation Regulation, which will bite at the end of this year. While the two regimes both require due diligence to be carried out by businesses, the EU Regulation is wider in terms of its scope – applying to a longer list of seven commodities (including rubber and coffee but still not maize). The EU Regulation also goes beyond requiring that commodities are produced in compliance with relevant local laws to also require business to establish there is no more than a very small risk of them having been produced on land which was still natural forest in December 2020.

There are also divergences around the treatment of timber. In the UK, regulation of forest risk commodities will remain separate from the regulation of timber – where the UK Timber Regulations, covering imported timber products, will remain in force. The EU have opted for a different approach, where the EU Timber Regulation will be repealed at the end of 2024 and timber will be included in the scope of the EU Deforestation Regulation. 

The UK government pledged at COP26 in 2021 to “halt and reverse forest loss and land degradation” by 2030.  At the beginning of 2024, we are just over two years closer to this deadline, and are yet to have clarity over the legislative timeline needed to deliver on this commitment. Against this backdrop, we wait to see whether the EAC’s report exerts enough pressure on the UK government to finally table the necessary secondary legislation.