The EUDR as a source of territorial shifts

1. Introduction 

The European Union Deforestation-Free Products Regulation (EUDR) is an EU regulation setting environmental and legality standards for products entering the EU market. It aims to reduce the EU’s impact on deforestation, forest degradation, and biodiversity loss by targeting seven high-risk agricultural commodities (soy, cattle, palm oil, wood, cocoa, coffee, and rubber). From a legal perspective, the EUDR is an internal act of the EU that governs what products can enter the EU market and be exported. However, the theory of change behind the regulation is inherently linked with the idea that unilateral measures adopted at one point of the value chain can change practices and socio-environmental dynamics at another point of the chain, making it a form of telecoupled regulation, that must be analysed and understood by connecting the different dots of the chains¹.

Hence, the EUDR goes beyond being a mere EU regulation; it’s a way of regulating global value chains (GVCs), influencing all phases of the chain, including territorial dynamics in the producing regions. In the context of the EPICC research project, interviews and observations were conducted to examine the EUDR through the lenses of the territorial dynamics of three regions connected to the EU market. The project thus investigated the territorial implications of the EUDR, exploring the potential consequences linked to its adoption and implementation. Five possible shifts were identified: 

1. a shift from export/production to the EU market to other markets that do not regulate deforestation in a similar way; 
2. a shift of deforestation to other ecosystems that are not currently covered under the deforestation-free definition, but that may be covered in the future; 
3. a shift to other commodities not covered under the scope of the regulation, but that may be covered in the future; 
4. a shift in land ownership and an intensification of concentration; and 
5. a shift from production for local food security/food autonomy towards the production of cash crops for the European market.

The Commission’s  2021 impact assessment acknowledged the first four shifts, but many EU stakeholders, as per interviews, only partially recognized them or remained skeptical. Both the impact assessment and stakeholder responses, however, overlooked the socio-ecological impacts of the EUDR beyond production, particularly concerning land tenure rights, conflicts, and future food security. Addressing these aspects would have required deeper engagement with local communities and a more tailored regulation, exceeding the feasibility of the EU regulator.

2. Shift of non-deforestation-free products to other markets

The stricter deforestation-free and legality requirements in the EU market for specific commodities may lead to trade diversion to less stringent global markets (so-called leakage). This underlines the transnational character of the regulation, but also points to potential limitations in the overall effectiveness of the EUDR. Although the regulation aims for ‘sustainability’ and reduced deforestation, there is a risk of shifting deforestation to other markets, potentially not curbing the overall deforestation trend. Conversely, the prospect of future regulations in other markets could expedite deforestation rates as countries may seek to evade conditions akin to those imposed by the EU.

Various non-governmental organisations (NGOs) have raised the possibility of companies and smallholders redirecting their products to markets with less stringent regulations to avoid EUDR restrictions, posing higher risks for commodities like coffee and cocoa due to lower capital, smaller plots, and recent deforestation². By opposition, large-scale farms would be less affected, having deforested before 2021 and having the financial capacity for required data. According to some EU NGOs, smallholders would thus be prompted to explore markets with lower informational requirements. Producer countries have also voiced concerns, fearing substantial trade diversion and expressing concerns about changes in market dynamics, suggesting businesses may shift products or production strategies if the perceived benefits of complying with the regulation do not justify the associated costs. This, in turn, may hinder the regulation’s contribution to deforestation reduction efforts in these countries.

The Commission’s 2021 impact assessment acknowledged the potential shift of non-deforestation-free exports to markets outside the EU with less stringent regulations. It specifically recognised possible economic impacts in third countries, including higher compliance costs and changes in trade flows. The assessment proposed two approaches to minimise this shift: (a) implementing the benchmarking system to incentivise producer countries to combat deforestation and (b) emphasising international cooperation for a global standard. Some EU actors interviewed have notably argued that the EU has already engaged in dialogue with producing countries to harmonise rules, aligning with the EUDR’s objectives to prevent global deforestation and forest degradation. However, there are inconsistencies in the EU’s approach to addressing the leakage of non-deforestation-free products to other global markets. 

First, the EU advocates for stronger partnerships with producer countries and international cooperation with major consumer nations to establish a ‘global level playing field’ in addressing deforestation and forest degradation. However, there are concerns about the internal consistency of the EU’s narrative. While emphasising positive outcomes in reducing the production and consumption of deforestation-linked commodities, the EU acknowledges a simultaneous increase in demand for such commodities, particularly in Asia. The EU also urges other major consumer countries with similar initiatives, like the United Kingdom and the United States, to take further action. This dual stance raises doubts about the effectiveness of the EU regulation and the absence of a robust support and partnership system.

First, despite the EU’s focus on preventing trade diversion by embedding sustainable development objectives in future free trade agreements, the objectives of the EUDR differ significantly from the expansion of agricultural boundaries and associated socio-environmental impacts seen in EU trade agreements with producer countries (e.g., EU-Mercosur Trade Agreement). Secondly, the proposed mitigation measures essentially overlook historical global trade dynamics and resource exploitation that have influenced production and extraction territories. Further exploration of this point will be covered in upcoming publications.

3. Shift to other ecosystems not covered under the ‘deforestation-free’ definition

Forests are defined in the EUDR as “land spanning more than 0.5 hectares with trees higher than 5 metres and a canopy cover of more than 10 percent, or trees able to reach these thresholds in situ, excluding land that is predominantly under agricultural or urban land use” (Art. 2.4). The impact assessment acknowledged the risk of deforestation and forest degradation shifting to other excluded ecosystems, raising concerns about the potential consequences of excluding high-carbon stock and biodiversity-rich ecosystems. Stakeholders have raised concerns that in the future, agricultural expansion may shift from ‘forests’ to other natural ecosystems due to this exclusion.
The expected shift in agricultural production to other ecosystems stems from the concern that stricter regulations in one region might displace deforestation activities to other areas, resulting in a transfer rather than a genuine reduction in deforestation³. The regulation’s limited scope poses challenges, potentially leading to greater socio-environmental impacts in excluded ecosystems. This raises concerns about the EUDR’s policy coherence, given the EU’s significant imports from areas not covered by the regulation, like the Brazilian Savannah (Cerrado). The restricted coverage may also contribute to land use conversion, leading to increased demand for land in regions not traditionally associated with deforestation. This could result in agricultural frontier expansion, or competition for land, increasing pressure on the territories of indigenous peoples, local communities, and other groups affected by the regulation.

The EU promises future discussions on expanding and diversifying the EUDR’s definition to address the EU’s impact on natural ecosystems conversion and degradation (Article 34(2)). This potential expansion aims to include grasslands, peatlands, and wetlands. Despite assurances, discussions among EU stakeholders about extending ecosystem coverage have been limited. Some argue it is not an imminent issue and can be addressed in upcoming revisions, while others see the current strategy of starting with a limited set of ecosystems as a pragmatic approach. The impact assessment more specifically highlights that “an expansion of the scope at this stage was considered detrimental to the effectiveness and enforceability of the policy measures hereby assessed”. 

There is therefore a prevailing belief that the EUDR’s review process will efficiently address adverse consequences. However, we currently have two reservations about this assumption: the regulation (a) overlooks intricate social-ecological relationships surrounding ecosystems and (b) fails to consider other territories transformations beyond agricultural commodity production, like logistics activities, exerting increased pressure on ecosystems. Consequently, in both cases, even if a commodity meets the EUDR requirements, it could still be linked to deforestation in another region.

4. Shift to other commodities not covered under the scope of the regulation

The initial list of seven commodities under the EUDR may prompt a shift of deforestation or unsustainable practices from regulated to unregulated commodities. Acknowledged in the impact assessment, this anticipated shift could lead to the displacement of deforestation activities to other commodities, resulting in a transfer rather than a genuine reduction in deforestation. Discussions during the EUDR decision-making process emphasised the need to include more EU-imported commodities linked to global deforestation, such as natural rubber, avocado, dairy, sugar cane, corn, and wheat. Multi-stakeholder meetings, part of the Commission Expert Group/Multi-Stakeholder Platform on Protecting and Restoring the World’s Forests, underscored concerns that a limited list might divert attention from broader ‘sustainability’ issues and lead to unintended consequences. While the initial list was expanded to include natural rubber, significant commodities like maize remain excluded. 

Stakeholders anticipate that the review process will address it by gradually expanding the regulatory framework based on the impact of commodities on deforestation and forest degradation (Art. 34.2). This approach is also favoured in the impact assessment, suggesting the review process will help mitigate changing trends in commodities linked to deforestation. However, although the shift to other commodities not covered in the scope has been recognised in the impact assessment, what is not taken into account is the potential scenario where stricter regulations on covered commodities result in the substitution of those commodities by other ones, consequently causing deforestation outside the purview of the regulation.

5. Shift in land tenure and more market concentration

Peasants, farmers, and small-scale producers face increasing challenges, losing access to their land due to large-scale investments and agricultural commodity production⁴. They also comprise segments of society that would gain the most from land reform, the allocation of new agricultural land, or the redistribution of land currently held by large agricultural entities. The historical connection between long-distance trading, agricultural industrialization, and concentrated land ownership has exacerbated power inequalities within global agricultural sectors. Consequently, this historical pattern has resulted in the displacement of individuals and communities, restricting their rights, autonomy, self-sufficiency, and decision-making authority.

However, the EUDR appears oblivious to the connection between long-distance trade and land concentration, despite acknowledging the uneven impact across different scales and methods of agricultural production. Despite this recognition, it lacks specific measures to address the potential consolidation of agricultural capital due to the higher cost of trading with the EU. The mandatory use of technology and the obligation to ensure transparency and traceability may not only intensify market access and inequalities but also lead to further concentration of land ownership among a few dominant actors capable of meeting the EUDR requirements and investing in agricultural land. Several key points deserve attention.

First, research suggests that the EUDR could raise the price of ‘clean land’ (unaffected by deforestation before December 31, 2020), making it more profitable for larger traders⁵. This would limit access to new land to those with large capital. Additionally, the increased price of ‘clean land’ might incentivise small-scale farmers and smallholders to sell their land to larger corporations. Ironically, the push to sell agricultural land owned by peasants and small-scale farmers to large traders could prompt these actors to relocate to forested areas to sustain their livelihoods, potentially leading to new deforestation. Second, the EUDR scenario favours large corporations over peasants and local farmers. Compliance costs for businesses are higher when sourcing from many smallholders, potentially leading large companies to restructure supply chains, working with fewer, larger suppliers or directly sourcing from large-scale producers with greater capacity to comply. This shift could exclude and marginalise smallholders and cooperatives, strengthening the market power of major players at the expense of an egalitarian distribution of market influence. Third, the EUDR may raise concerns about future land reforms and the distribution of non-farmed land for agricultural purposes. Countries like Bolivia, for instance, have traditionally identified ‘terras fiscales’ or public lands as areas intended to ensure access to land for farmers, indigenous groups, and collectivities with limited or no land access. Some of this land, characterised by primary forests and already used by local communities and indigenous people but not titled or cleared, would have no opportunity to be integrated into value chains serving the EU market under the EUDR structure. This limitation may impact the range of opportunities available to farmers with existing land access and those who may benefit from future ‘terras fiscales’ distribution. While the inability to convert the land into cleared space for EU commodities may incentivise agro ecological production, local food consumption, or other socio-cultural and economic practices, these alternatives seem less financially lucrative and are not aligned with the EU’s envisioned supply chain.

The changes in land and market concentration in production territories have however received limited attention from EU stakeholders. The impact assessment only acknowledges the possibility of indirect land use changes, neglecting broader issues affecting small-scale farmers and peasants not currently in transnational food chains. The impact assessment suggests addressing this through gradual product scope expansion and increased partnerships with producing countries. However, the regulation currently does not provide details on participation mechanisms, nor on the power inequalities existing between groups and companies seeking to exploit resources and local populations. It is still unclear to what extent EU delegations are currently engaging in initiatives to address these risks, including financial transfers, development cooperation, and community-level engagement in producing countries.

6. Shift from local food security to cash crops

Local communities, smallholders, peasants, and farmers are increasingly impacted by the establishment and intensification of industrial and transnational food chains, even when they do not grow global food commodities⁶. Despite being hailed by EU actors as a groundbreaking regulation to address deforestation and forest degradation in agricultural production, the EUDR primarily relies on an export-oriented agricultural model, overlooking the potential spillover effects on land and territories not integrated into the EU market. We argue that agricultural land is a crucial yet under-discussed aspect of the EUDR, as the regulation may lead to the transformation of cultivated land into areas primarily used for producing exported commodities covered by the regulation. Interestingly, the conversion of agricultural land into export-oriented land raises no concern under the EUDR.  If this was the case, this shift is expected to impact local food security for the following reasons.

First, the shift from land producing for local consumption to land for EU commodity production may impact the availability and accessibility of locally produced food, especially for vulnerable members of the populations, potentially worsening food insecurity in the affected territories. Replacing food with cash crops might enhance farmers’ economic returns but could also diminish nutrient and food availability, leading to repercussions in terms of inflation and provisioning. Second, the EU’s approach on ‘greening food chains’ promotes and normalises commodified food systems, potentially displacing or compelling peasants and farmers to adopt market-oriented practices. Despite less than 30% of the globally produced food being traded, and the significant role small-scale and family farmers play in global food supply (7) the financial and regulatory incentives for shifting to cash crops may increase pressure on land, transactions, and concentration. Additionally, this shift may force farmers away from the land into urban settings and precarious situations, exacerbating socio-economic issues among marginalised local communities, small-scale farmers, and agricultural workers currently not involved in the production of these commodities but facing financial pressures and other forms of (il)legal pressures over their land. Third, the intensified production of agricultural commodities may result in unsustainable land use changes, converting land from diverse and community-based agroecological or agroforestry methods to monoculture and chemical-intensive practices. This raises questions about the regulation’s broader ‘sustainability’ objectives if it does not address or oppose the transformation of land from locally diverse and community-based agriculture to export-oriented monoculture. Recognizing the potential impact of the EU regulatory decision on encouraging a shift toward environmentally and socially unsustainable production methods on land designated for local food production is necessary.

The regulation, albeit laced with evocative buzz words such as ‘sustainable agricultural production’, seems entrenched in commodity-based and export-oriented agriculture. While the EU’s official stance hints at openness to alternative agricultural visions and a push for ‘sustainable’ agriculture, the regulation provides little space for engagement with non-state and non-corporate actors and their evolving understanding of food systems. There is also a limited understanding among EU actors regarding the impacts of the EUDR on the right to food and food security in territories already producing for the EU and those potentially shifting toward export-oriented production. Despite assurances that the regulation and future partnerships will prevent the exclusion of ‘smallholders’ from commodity supply chains and alleviate economic repercussions, such support does not necessarily promote the establishment of local markets and regional modes of production and consumption. While acknowledging the link between international trade and biodiversity loss, the EU, in pursuing ‘sustainability’ objectives, seems to assume that smallholders, peasants, and farmers in third countries are primarily responsible for feeding Europe.

7. Conclusion

The regulation’s narrow focus on the causes of deforestation and forest degradation may result in adverse consequences for the environment and socio-economic practices. As the EU Green Deal is doing in other areas of the economy, the EUDR appears to imply that it can detach global trade from its socio-environmental externalities. However, this may be feasible concerning the impact of individual consumption on primary forests after January 1, 2022, but it doesn’t necessarily hold true for the changes and effects on the ground as public authorities, global traders, and producers navigate the new limitations and ‘opportunities’ presented by the regulation. To conclude, focus should be given to three key aspects: (a) recognising that the effects of the EUDR extend beyond market dynamics and economic factors; (b) acknowledging that there is no unequivocal understanding of socio-ecological systems, necessitating increased attention to indigenous peoples, local communities, and other social groups; (c) addressing and acknowledging the historical and present role of the EU in compromising food security and exacerbating land concentration in third countries.

---

1. Boillat, S., Martin, A., Adams, T., Daniel, D., Llopis, J., Zepharovich, E., … & Pascual, U. (2020). Why telecoupling research needs to account for environmental justice. Journal of land use science, 15(1), 1-10; Liu, J., Dou, Y., Batistella, M., Challies, E., Connor, T., Friis, C., & Sun, J. (2018). Spillover systems in a telecoupled Anthropocene: typology, methods, and governance for global sustainability. Current Opinion in Environmental Sustainability, 33, 58-69; Friis, C. et al. (2016). From teleconnection to telecoupling: taking stock of an emerging framework in land system science. J Land Use Sci. 11, 131-153 ↩︎
2. Fern, EU law on deforestation: Policy makers prioritise trees over people, available at: https://www.fern.org/publications-insight/eu-law-on-deforestation-policy-makers-prioritise-trees-over-people/; FTAO, Deforestation-free Supply Chains, available at: https://fairtrade-advocacy.org/our-work/eu-policies/sustainable-and-deforestation-free-supply-chains/ ↩︎
3. The risk of leakage and displacement from protected to unprotected regions is well-documented in land system science: Meyfroidt, P., Börner, J., Garrett, R., Gardner, T., Godar, J., Kis-Katos, K. & Wunder, S. (2020). Focus on leakage and spillovers: informing land-use governance in a tele-coupled world. Environmental Research Letters, 15(9); Moffette, F., & Gibbs, H. K. (2021). Agricultural displacement and deforestation leakage in the Brazilian Legal Amazon. Land Economics, 97(1), 155-179;  Villoria, N., Garrett, R., Gollnow, F., & Carlson, K. (2022). Leakage does not fully offset soy supply-chain efforts to reduce deforestation in Brazil. Nature Communications, 13(1), 5476 ↩︎
4. Ferrando, Tomaso, and Elizabeth Mpofu. “Peasants as “Cosmopolitan Insurgents”.” (2022): 97 ; Bombardi, L. M. (2021). Geography of Asymmetry: The Vicious Cycle of Pesticides and Colonialism in the Commercial Relationship between Mercosur and the European Union. The Left group in the European Parliament, European Parliament, 20;  Barrantes, MA Naranjo, A. K. K. Rahn, J. van den Berg, and E. D. Berkhout. “Deforestation and forest degradation in coffee supply chains: Wageningen Economic Research policy brief.” (2023). ↩︎
5. Ferrando, Tomaso, and Elizabeth Mpofu. “Peasants as “Cosmopolitan Insurgents”.” (2022): 96. ↩︎
6. a) S. Blondeau, Enhancing the livelihood of family farmers with the law, FAO Legal Papers, No. 112. Rome, FAO; FAO, 2021; b) “Small family farmers produce a third of the world’s food”. Available at: https://www.fao.org/newsroom/detail/Small-family-farmers-produce-a-third-of-the-world-s-food/en; c) F. Pendrill et al., Agricultural and forestry trade drives large share of tropical deforestation emissions. Glob. Environ. Change 56, 1–10 (2019). doi: 10.1016/ j.gloenvcha.2019.03.002. ↩︎