The postponement of the EUDR has an impact on international markets which are showing bullish trends

Recently, the European Parliament approved the Commission’s proposal to postpone the applicability of the EU Deforestation Regulation (EUDR) by one year, but introduced a series of amendments aimed at easing some of the obligations for operators. This move reopens the legislative process, bringing the issue back to the European Council and the Commission. The Commission can accept the amended version, withdraw it or oppose it. However, if the postponement is not approved by 30 December 2024, the Regulation, in its original version, could enter into force “by default”.

Reactions on financial markets

L’annuncio ha generato volatilità sui mercati delle materie prime. Secondo le analisi di Areté, i prezzi di beni come cacao, caffè e altri prodotti interessati dal Regolamento hanno subito oscillazioni rilevanti. Il cacao ha registrato un rialzo del 7,1%, il caffè robusta del 3,1% e il caffè arabica del 2,7%. I prezzi di soia e olio di palma, invece, sono rimasti relativamente stabili, data la minore rilevanza dell’UE come importatore globale di queste materie.

Objective: stop deforestation

The EU Deforestation Regulation was created with the aim of preventing the entry into the European market of goods that contribute to deforestation and forest degradation, both within the Union and globally. Deforestation and forest degradation represent serious threats to the climate and biodiversity. The FAO has estimated a loss of 420 million hectares of forest between 1990 and 2020, an area greater than the entire extension of the European Union.

The markets affected and the complications

Many non-European countries, 17 to be precise, have criticized the Regulation, in particular Brazil has defined the EUDR rules as “arbitrary, unilateral and punitive”, underlining how they do not take into account the socio-economic and environmental differences between the various countries. These nations have expressed concern about their ability to comply with the obligations of the European regulation, a theme also taken up during the United Nations General Assembly.

The postponement and the amendments proposed by the European Parliament reflect a difficult balance between the need to preserve the environment and that of not excessively burdening operators and international partners. What is certain is that the possibility that the Regulation enters into force in its original version represents a concrete challenge for market operators.

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