An Introduction to Deforestation Regulations & Compliance
Deforestation is an alarming global crisis affecting biodiversity, climate, and human rights. The devastating impacts of deforestation, including reduced carbon storage, habitat loss, and biodiversity decline, have prompted governments worldwide to adopt legislation mandating deforestation-free supply chains. These laws require companies to ensure that the products they source and sell are not contributing to the destruction of the world's forests.
Companies must address their supply chain's impact on deforestation and remain compliant with evolving legislation, such as the European Union Deforestation Regulation (EUDR), the United States Lacey Act, and others. This process generally involves working with suppliers, conducting due diligence to identify any links to deforestation, and meeting reporting requirements. By complying with global deforestation regulations, businesses will play a significant role in preserving our forests and protecting the planet for future generations.
This e-book will explore the global impacts of deforestation on biodiversity, climate, and human rights, and explain why deforestation-free supply chains are essential. It outlines the evolving regulatory landscape—including the EU Deforestation Regulation (EUDR), the U.S. Lacey Act, and more—and examines common challenges in achieving compliance. Finally, it demonstrates how Source Intelligence’s EUDR solution streamlines due diligence and responsible sourcing to help your business maintain a sustainable supply chain.
Why Deforestation Matters
Understanding Deforestation
Deforestation is defined as the intentional clearing of forested land for a particular non-forest use, such as agriculture, cattle ranching, logging, mining, and the extraction of oil and gas. While deforestation has occurred around the world for centuries, current-day deforestation is primarily driven by agricultural expansion, which is responsible for about 90 percent of global forest loss. This expansion is fueled by worldwide consumption and the demand for food and agricultural products. Under a growing global population, this demand continues to increase, and the felling of forests continues at alarming rates.
Commodities Driving Deforestation
While several commodities and related products are linked to deforestation, beef cattle, soy, palm oil, and forestry products are the primary drivers. These commodities alone account for nearly three-quarters of global deforestation.
Beef Cattle
Pasture expansion for raising cattle is responsible for about 41 percent of deforestation, which is 10 percent more than the three remaining primary commodities combined. Most deforestation attributed to cattle production occurs in the tropical forests of Latin America and Africa.
Beef is raised to produce meat, dairy, and byproducts (internal organs, hides, hooves, horns, etc.). Beef byproducts are used in the manufacturing of numerous consumer products, such as leather, instrument strings, adhesives, lotion, paint, and fireworks.
Soy & Palm Oil
Farmland expansion for oilseed production accounts for about 18 percent of deforestation. Soybean and palm oil dominate the oilseed industry, but several other smaller commodities like sesame, rapeseed, and sunflower oil are included in this category. Palm oil is primarily sourced in Indonesia, while soybean oil is the most common oilseed in Latin America.
Palm oil is the most widely used vegetable oil in the world and is found in countless products, such as lipstick, instant noodles, detergent, and soap. About 93 percent of soybean production is primarily used as livestock feed, biofuel, and oil. Soybean oil is widely used in food products, including margarine, mayonnaise, salad dressing, and frozen foods. Despite the common misconception that meat and dairy alternatives (such as tofu or soymilk) accelerate deforestation, soy-based food products are a sustainable option. Only 7 percent of soybeans are used directly for human food products, meaning soybean production for human consumption has a far smaller impact on deforestation than livestock production for the same purpose.
Wood Products
Wood products are responsible for about 13 percent of deforestation. In Europe and North America, trees are primarily grown on previously unforested land or managed plantation forests. However, in most tropical countries, trees are sourced from the logging of primary rainforests, destroying them in the process. The rainforests of Indonesia and elsewhere in Asia have been impacted significantly by logging and forest degradation.
Wood products fall under two categories: pulp and timber. Pulp, made from tree fibers, is used in producing paper and related products, such as paper towels, books, and packaging. Timber is used for construction, furniture manufacturing, and fuel.
Other types of agricultural production driving deforestation at a lower rate include cereals, vegetables, fruit, nuts, rice, sugar, and plant-based fibers. Other deforestation drivers beyond agricultural production include settlement expansion, infrastructure expansion, and mineral mining.
The Impact of Deforestation
The world loses 10 million hectares of forest each year due to deforestation; one hectare is the equivalent of about 2.47 acres (or two American football fields). The continents most affected by deforestation are Africa, South America, and Asia (specifically in the southeast regions). Despite deforestation rates slowly declining in recent years, it continues to cause far-reaching negative impacts on our planet. Three of the most significant impacts of deforestation include habitat loss, climate change, and soil erosion.
Habitat Loss
One of the most immediate consequences of deforestation is the loss of habitat for countless species of plants and animals, leading to a decline in biodiversity. Forests are home to about 250 million people and 80 percent of the world’s life on land but, due to the destruction of ecosystems caused by deforestation, the world is losing 137 species of plants, animals, and insects each day—that's an incredible 50,000 species each year, including critically endangered species such as Orangutans, Pygmy Elephants, and the Sumatran Tiger.
Climate Change
Deforestation is a major contributor to climate change. Trees play a vital role in absorbing carbon dioxide, a greenhouse gas that contributes to atmospheric warming. As forests disappear, the carbon stored in both the trees and the soil is released into the atmosphere, exacerbating the problem. Furthermore, clearing forested land requires heavy machinery powered by fuel, which also emits greenhouse gases.
Soil Erosion
Deforestation leads to soil erosion, as the protective cover of trees is removed, leaving the soil vulnerable to erosion by wind and rain. This, in turn, hampers agricultural productivity and threatens food security for communities that rely on the land for sustenance.
Discover more about deforestation compliance
You've learned why deforestation matters, what drives it, and its global impact. Next, explore how deforestation affects supply chains, review key regulations, and uncover compliance challenges. Finally, see how Source Intelligence’s EUDR solution empowers a deforestation-free supply chain.
Read the full e-book to gain actionable insights for sustainable sourcing.