Environmental devastation: A file photo of deforestation in the Amazon rainforest. The EU’s new rules calling for deforestation-free supply chains come into force Dec 31. — AFP
HANOI: As the EU Deforestation Regulation (EUDR) is set to officially take effect on Dec 31, 2024, Vietnamese enterprises have been advised to act swiftly to comply with this rule to maintain their export activities to this major market.
The Vietnam Trade Promotion Agency under the Industry and Trade Ministry (MoIT) highlighted that under the regulation on deforestation-free supply chains, issued in June 2023, the EU will prohibit the import or consumption of products and goods linked to deforestation or forest degradation.
Businesses must demonstrate that their products do not originate from land that was deforested or subject to forest degradation after Dec 31, 2020.
The EUDR targets commodities that significantly impact deforestation, such as coffee, cocoa, soybean, palm oil, cattle, timber and wood products, and rubber.
Among these, Vietnam has three major exports – timber, rubber, and coffee – that are significantly affected by the regulation, contributing over US$2.5bil in revenue from the EU.
Hoang Thanh, a representative of the EU Delegation to Vietnam, noted that the EUDR will be applied to large enterprises from Dec 31, 2024, and to small and medium enterprises (SMEs) from June 30, 2025.
Only products meeting the conditions of non-deforestation will be allowed to enter the EU market or be exported from the EU.
Discussing challenges posed by the EUDR, Dinh Sy Minh Lang, a representative of MoIT’s European-American Market Department, mentioned that origin tracing and EUDR certification procedures might increase export costs, posing risks to SMEs.
Vietnamese goods will face significant competition as rivals are better prepared for EUDR compliance.
The difficulty in identifying legal farming zones will impact the assessment and classification of risks based on country and production zones.
Controlling input materials in the coffee, timber, and rubber supply chains is relatively challenging due to multiple layers of traders, he noted.
Experts suggested that as the time for implementing the EUDR and other stringent EU rules approaches, enterprises should promptly adjust their production activities.
Compliance with the EUDR will present numerous opportunities for enterprises, including enhancing their competitiveness, as sustainable supply chains and quality material sources are prioritised by European partners.
Thanh added that the EU will assist South-East Asian countries, including Vietnam, in building capacity, raising awareness, and sharing information about EUDR requirements.
The Vietnam Rubber Association proposed that the Agriculture and Rural Development Ministry issue technical guidance for the targeted sectors so they can develop timely response plans.
It also recommended that government agencies devise measures to support businesses in adapting to the EUDR, particularly in terms of positioning data and origin tracing.
Echoing this view, Assoc Prof Dr Nguyen Thuong Lang from the National Economics University suggested that authorities provide more detailed instructions to enterprises, establish a support website, or create groups of related companies and parties to keep them updated on the EUDR and other EU green standards.
It is also necessary to issue detailed policies and guidance, establish a question-and-answer unit to promptly address information needs, and conduct surveys to assess the capacity of enterprises to offer appropriate assistance, he added. — Viet Nam News/ANN
