EU deforestation regulation delay frustrates tyre manufacturers

The European Tyre & Rubber Manufacturers’ Association (ETRMA) is concerned at the European Commission’s intention to postpone the EU Deforestation Regulation (EUDR) for another year.

Adam McCarthy, ETRMA secretary general, says: ‘The European tyre and rubber industry, together with millions of natural rubber producers, is upstream-ready. A further delay risks prolonging uncertainty for operators who have prepared in good faith and are looking forward to demonstrating their commitment.’
Critics have suggested the delay, over IT concerns, is a pretext for slowing down the regulation. The United States has been a vocal critic, arguing it creates costly and unnecessary obligations for American companies and could have substantial negative consequences for global supply chains.

Transactions

News of further delay came from Jessika Roswall, Commissioner for Environment, Water Resilience and a Competitive Circular Economy, on 23 September. She told the European Parliament and Council that the Commission’s information system cannot adequately handle transactions covered by the EUDR, which applies to cattle, cocoa, coffee, oil palm, rubber, soya and wood.

‘The Commission’s assessment is that this will very likely lead to the system slowing down to unacceptable levels or even to repeated and long-lasting disruptions, which would negatively impact companies and their possibilities to comply with the EUDR,’ she wrote.

Due diligence

‘Operators would be unable to register as economic operators, introduce their due diligence statements, retrieve the necessary information from the IT system, or provide the necessary information for customs purposes where relevant. This would severely impact the achievement of the objectives of EUDR, but also potentially affect trade flows in the areas covered by the legislation.’Roswall said there were insufficient guarantees that the IT system could sustain the expected load. The European Commission originally planned to enforce the EUDR at the end of 2024. This was put back for a year for larger operators and until 30 June 2026 for smaller businesses following pressure from industry groups and major exporters such as Indonesia and Malaysia. According to FastMarkets, the possibility of another extension has hurt long-termv confidence.

IT bottlenecks

ETRMA argues the only way to make the extra time meaningful is to simplify due diligence obligations ending with the statement released by the first placer on the EU market and remaining valid for the whole product commercial life, without involving downstream operators in unnecessary burdens. This approach would also support in resolving some of the IT bottlenecks now cited as reasons for delay.

‘The objective of halting deforestation is right and urgent. But endless transition periods without simplification will not deliver results,’ McCarthy argues. ‘ETRMA calls on EU institutions to ensure that, if more time is granted, it is used to fix the regulation – not to stall it.’