Deforestation – a new agenda for more sustainable global agri-food systems in 2023?

Mari Carlson | January 4, 2023

The first report to read in 2023 is perhaps the United Nations Global Land Use Outlook. It provides a comprehensive picture of the state of land – soil, water, and biodiversity. It has many important messages that we typically neglect from one year to another. One of them is that modern farming with intensive monoculture, deforestation, and other ecosystems uses for agricultural purposes generate the most of carbon emissions associated with land use change. The IPCC estimates that food systems in their entirety (including agriculture and land use, storage, transport, packaging, processing, retail, and consumption) are responsible for 21-37 percent of annual greenhouse gas emissions globally. Thus, sustainable food systems are important to the success of the global climate agenda. This is exactly what our MATS project is interested in: searching for ways to enhance sustainable food systems as part of policy solutions that make agricultural trade more sustainable.

So, how do forests have anything to do with sustainable global food systems? One of the most pressing issues regarding food systems is deforestation, which means conversion of forest to other land uses, such as agriculture and infrastructure. FAO’s recent Remote Sensing Survey reveals that agricultural expansion is driving almost 90 percent of global deforestation of which around 50 percent is due to conversion of forests into cropland. Livestock grazing accounts for around 40 percent whereas urban infrastructure and other uses around 10 percent. Although the FAO survey confirms a slowdown in deforestation, tropical forests remain under pressure, particularly in Africa and in Latin-America. There is no need to be an expert to understand that these areas will be impacted most when deforestation “becomes a problem”.

Yet although the majority of deforestation-associated goods (e.g. palm oil, wood, cocoa, coffee, soy, beef) are consumed at a local or regional level, there is evidence that international trade in these goods accelerates deforestation. According to WWF’s report, the biggest importers of deforestation were China (24%), EU (16%), India (9%), the United States (7%) and Japan (5%). The European Commission has estimated that its consumption is responsible for 10 percent of global deforestation. If we then look at the portion of deforestation-linked goods traded internationally, the EU’s share is 36%, being considerably higher than the WWF’s estimate.

The EU has taken these numbers seriously. In line with the EU’s Communication on World Forests and Green Deal, at the end of 2021, the European Commission proposed a Regulation on deforestation free supply chains. Already at the end of 2022 a provisional political agreement was reached between the EU institutions. Once the Regulation is formally adopted and in force, operators and traders will have 18 months transition period to implement the new rules.

The end of the 2022 was a wake-up call for all those who considered the Regulation to be only about forests. It is very little about forests and mostly about agriculture, because in a nutshell, the EU’s deforestation regulation means that companies placing palm oil, cattle, soy, coffee, cocoa, timber, and rubber, as well as derived products (such as beef, furniture, or chocolate) on or exporting from the EU market, must comply with strict due diligence obligations. For example, operators and traders must prove that the products are produced on land that was not subject to deforestation after 31 December 2020. This includes an obligation to collect precise geographical information on the farmland where the commodities were grown. Goods must also be legally produced meaning that they comply with all relevant applicable laws in force in the country of production.

Regarding international trade rules (particularly WTO rules) and reaction from third countries, the Commission has assured that this measure will comply with all international obligations, and that the EU will cooperate with the affected countries. It will be interesting to follow how the EU’s benchmarking system that assess countries and their level of risk of deforestation and forest degradation (a high, standard, or low risk) will be evaluated by trading partners, and eventually in the light of the WTO legal framework. Already now, some countries deem the EU’s actions with a critical tone. Either way, the Commission’s Regulation on deforestation-free supply chains will shape the agenda of businesses and policymakers alike in their quest to make sustainable global food systems more sustainable in 2023.

The corresponding writer is the co-coordinator for the Making Agricultural Trade Sustainable project. She is also a doctoral researcher in the doctoral programme in Sustainable Use of Renewable Natural Resources at the University of Helsinki. Her research combines trade policy, environmental sustainability, and agriculture. Before joining the MATS team, she worked as a commercial secretary on trade and environment in the Ministry for Foreign Affairs of Finland.