AL-INVEST Green promotes dialogue on the challenges of the new EU deforestation regulation

Lima, 07 November 2023 - The European Union (EU) Green AL-INVEST programme served as a platform to promote dialogue on the EU's new EU regulation on deforestation (EUDR), which promotes more sustainable practices in the private sector. Leaders of Latin American business organisations, EU experts and local specialists met in Lima to discuss the challenges posed by the EUDR in the transition of companies and small producers towards a greener economy that represents growth opportunities.

Organised by Component 1 - the private sector support component - the dialogue was divided into two thematic axes: the regulation of deforestation-free value chains in the agri-food industry, and regulations to foster the transition towards more circular and resource-efficient business models.

The event highlighted the crucial concern for coffee and cocoa producers, particularly in Peru, sectors for which adapting to the new EUDR is a priority. Experts predict that, without deforestation-free certification, Peruvian exports to the EU, which in 2021 reached US$3.261 billion, could be seriously affected.

The dialogue was opened by Ilias Tsilekas, EU External Trade and Economic Affairs Officer in Peru. "The regulation translates as a fundamental environmental tool to comply with international commitments and to promote sustainable agricultural production, sustainable forest management and the development of transparent value chains," he said.

Germán Zarama, policy analyst and OECD (Organisation for Economic Co-operation and Development) focal point for Latin America and the Caribbean, then highlighted the entry into force of the EUDR on 29 June 2023. "This is the first time that a major trading bloc has addressed the problem of deforestation so comprehensively. The EUDR bans the import of commodities produced on deforested, degraded or converted land after 31 December 2020, including products such as palm oil, soy, timber, cattle, cocoa, coffee, rubber and its derivatives.

During the dialogue, concerns were raised about a possible disincentive to purchase products in high-risk areas from smallholders who do not comply with the necessary certification. Producers, traders and the Peruvian state were therefore urged to prepare, map the consequences in their supply chains and work on a joint agenda to address them, ensuring that smallholders have access to growth and income opportunities while caring for forests.

María Merino, regulatory affairs expert at NIRAS, emphasised the need for the region to move towards new, more sustainable models. "Latin America and the Caribbean have mostly linear production processes. The region's development is based on the sustainable use of the region's natural resources. There is a crucial need to move towards more circular business models, which represents a great opportunity for business," he said.

AL-INVEST Verde is a European Union programme to promote sustainable growth and job creation in Latin America. It aims to support the transition towards a low-carbon, resource-efficient and more circular economy, to facilitate the implementation of sustainable production models.

The annual event, organised by Component 1 of the programme, has served as a crucial platform to address challenges and seek solutions. Thanks to the support of AL-INVEST Verde, SMEs in the region have the opportunity to adapt to these new regulations, thus ensuring the sustainability and continued success of exports of products such as coffee, cocoa, palm oil, timber, livestock, soy, rubber and derived products to the European Union.

About AL-INVEST Green

AL-INVEST Verde is a European Union programme whose main objective is to promote sustainable growth and job creation in Latin America by supporting the transition towards a low-carbon, resource-efficient and more circular economy. Through Component 1, the programme manages funds for the implementation of innovative projects by business organisations to promote sustainable practices in the private sector (MSMEs) in Latin America. Component 1 is led by sequa, a German non-profit organisation operating worldwide with the aim of promoting the private sector.

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