According to Nikkei Asia , the EU Deforestation Reduction Regulation (EUDR) is designed to ban the import of seven commodities — cattle, cocoa, coffee, palm oil, rubber, soybeans and wood products — if they originate from land that has been deforested after 2020. Importers will have to provide “convincing and verifiable information” about their supply chains, including geolocation data on the origin of products. Compliance with the EUDR will become mandatory in December 2024 for large companies and in June 2025 for smaller companies.
A rubber plantation in Cambodia
Regional response
Some experts say the concern for Southeast Asia is that the EUDR will disproportionately hurt small-scale farmers while failing to adequately account for rubber's role in deforestation. "The risk is that smallholders will essentially be squeezed out of the market because there are too many requirements and too much effort to monitor and trace the rubber they produce," Jean-Christophe Diepart, a Cambodia-based agronomist, told Nikkei Asia .
Similar concerns are growing in Malaysia, which has joined Indonesia in negotiating the EUDR with the EU over concerns about the impact on its palm oil industry. But Malaysia’s $2 billion rubber export industry is also at risk. According to the Malaysian Rubber Board, the country exports about 17% of its rubber to the EU, its largest market after the United States. About 93% of the country’s rubber plantations are controlled by smallholder farmers.
In March, rubber farmers in Malaysia joined oil palm growers in filing a petition with the EU to protest the “unilateral and unrealistic” requirements in the EUDR, arguing that the regulation would exclude smallholders from the European market and exacerbate rural poverty.
Meanwhile, Thailand, the world’s largest rubber producer and exporter, is looking to comply with the EUDR. Regulators in Thailand have set up a national platform to help the country’s more than 5 million farmers meet traceability requirements.
Mission impossible?
According to research by Forest Trends (based in the US), EUDR compliance is a major challenge for Southeast Asian countries, including Vietnam. According to this organization, when entering Vietnam, rubber from Cambodia and Laos is mixed with local rubber, making traceability "almost impossible".
Diepart made a similar point, saying that in Cambodia, even basic information such as how much rubber is grown is not accurate, making it nearly impossible to trace the entire supply chain.
Some argue that it is too late to fix the environmental damage caused by the rubber boom, which ended with a severe price crash a decade ago. In Cambodia, for example, rubber was thought to be the main driver of deforestation until around 2012 or 2013, whereas now the main driver is the expansion of cashew plantations, according to Diepart.
Another issue for regional producers, large and small, is who will pay the extra costs of EUDR compliance. Thai Rubber Group President Vorathep Wongsasuthikul said building a system that allows customers to trace the origin of their products would add 10% to production costs.
New research on deforestation for rubber plantations
The amount of forest lost to rubber production in Southeast Asia could be two to three times higher than previously estimated, according to a study published in the journal Nature in mid-October. Using high-resolution satellite imagery, the researchers concluded that more than 4 million hectares of forest have been cleared for rubber plantations since 1993, with two-thirds of that in Indonesia, Thailand, and Malaysia. Looking at the larger region, which includes China’s main rubber-producing provinces of Yunnan and Hainan, the area under rubber plantations has increased from 10 million hectares in 2020 to 14 million hectares in 2023.
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