New Zealand exporters try to see forest for the trees with new EU import rules

New Zealand exporters sending wood or beef and leather products to the European Union (EU) will soon have to comply with new rules that aim to reduce deforestation in the supply chain.

New Zealand government officials and industry opposed the approach to anti-deforestation taken by the incoming European Union Deforestation Regulation (EUDR), due to increased compliance costs exporters will face in proving their products have not contributed to the loss of trees.

However, the European Commission was standing firm that imports of certain commodities had their part to play in addressing challenges related to deforestation, climate change and biodiversity loss.

Commodities being assessed by loss of forested land

A European Commission spokesperson said the EUDR covered seven key commodities, namely cattle, cocoa, coffee, oil palm, rubber, soya and wood.

"These commodities have been chosen on the basis of a thorough impact assessment identifying them as the main driver of deforestation due to agricultural expansion," they said.

Deforestation was defined as converting forests to land for agricultural use.

For New Zealand, this will affect the $213 million export trade of beef and leather exports into the EU, with new rules coming into force this December.

Exporters of wood products - a trade to Europe valued at around $100m - would be required to provide traceability processes to show that their products did not contribute to deforestation too.

Products that do not meet the new import requirements will be rejected at the border.

In recent months, the European Commission released further clarifications about the rules for operators and traders.

A spokesperson said it found New Zealand to be a country with "low risk of deforestation".

"Sourcing from low-risk countries entails simplified due diligence obligations for operators and traders," the spokesperson said.

"Concretely, this means that they need to collect information, but not assess and mitigate risks."

It also announced a 12-month phase-in for the new regime in December 2024, a year's delay after the original enforcement date to give operators time to prepare, they said.

"Given the EUDR's novel character, the swift calendar, and the variety of international stakeholders involved, a 12-month additional time to phase in the system is a balanced solution to support operators around the world in securing a smooth implementation from the start," they said.

"This is essential to guarantee certainty about the way forward and to ensure the success of the EUDR."

New Zealand government officials and industry push for exemption

The Wood Processors and Manufacturers' Association chief executive Mark Ross said a working group with forest growers, wood processors and the government had been set up to work through some issues relating to the new requirement, like geolocation requirements.

He said, overall, companies were "reasonably confident" they would be in a good position to meet the requirements.

"At first glance the EUDR appears complex, but the best way to overcome any risks associated with the legislation and to ensure that our wood product exporters remain compliant, is for the forestry and wood processing industries to continue to work closely together on fulfilling the EUDR requirements," said Ross.

"By taking the necessary steps to comply with EUDR, the New Zealand wood products industry can gain a market advantage in Europe and globally, which will further enhance our positive sustainable forestry and wood products reputation."

However, Minister of Agriculture, Forestry and Trade and Investment Todd McClay wrote to the European Commission early last year, urging it to exclude New Zealand and the pastoral farming system from the regulation, among other bilateral efforts.

"Without changes, this regulation risks making it too costly for many of our exporters to continue supplying the EU market, affecting over $200 million in Kiwi exports at a time when we should be growing this trade through the benefits of the NZ-EU Trade Agreement, not facing additional barriers," said McClay in October.

"New Zealand does not have a deforestation issue, and while we share the EU's goals of promoting deforestation-free products, we already have stringent domestic protections in place. Imposing these compliance costs on our exporters is not justified."

Industry group Beef and Lamb New Zealand helped successfully lobby for the exclusion of sheepmeat with its British counterparts, the UK National Sheep Association, but senior trade policy advisor Nicholas Jolly said in May last year, it should also extent to beef.

He said diverting products from the EU to other markets would significantly "devalue New Zealand's trade".

"The loss in beef exports would begin at approximately $98 million annually, while the impact on leather exports would also be substantial, considering 45 percent of New Zealand's leather exports by value go directly to the EU and it would be extremely difficult to find alternative markets."

Beef and Lamb New Zealand declined to comment further at the time of publish.

Sirma Karapeeva, chief executive of the Meat Industry Association (MIA), said the deforestation regulation was "unlikely" to tackle global deforestation, as it was "poorly designed and poorly drafted".

She said New Zealand already had strict environmental regulations with enforceable penalties for negatively impacting native vegetation.

"New Zealand beef exports are backed by world-leading sustainability credentials and should be treated differently to products from countries where deforestation is a genuine concern," she said.

Karapeeva said it was working closely with officials to advocate for a "more pragmatic and sensible solution" that recognised New Zealand's trend of afforestation.

A spokesperson for the Ministry of Foreign Affairs and Trade said the costs imposed on exporters were disproportionate to the risk that the product was actually linked to deforestation.

"New Zealand shares the European Union's objective of addressing global deforestation, but has consistently raised concerns with the approach taken in the EU Deforestation Regulation."

It also encouraged the Commission to address these concerns through the relevant committees of the New Zealand/EU Free Trade Agreement.

Supporting exporters to comply with the new rules

Large exporters had to comply with the new rules by 30 December, 2025 and June 2026 for smaller-sized exporters.

Ministry for Primary Industries' Bilateral Relations & Trade divisional manger Steve Ainsworth said it was continuing to liaise with beef and forestry sectors about the requirements.

"MPI and MFAT have maintained an open and active dialogue with the beef and forestry sectors to understand their concerns, keep them informed of developments, facilitate opportunities for engagement with the European Commission, and support their preparations for EUDR."

The MIA said it was supporting its members on how to comply.