The German automotive industry fundamentally supports the goals of the EU regulation to combat deforestation and forest degradation. The regulation stipulates that certain raw materials such as soy, oil palms, cattle, rubber and wood, as well as a large number of products made from them, may only be brought onto the European market and exported if they are free from deforestation and forest degradation. Hildegard Müller, President of the Association of the Automotive Industry (VDA), emphasizes: “We support the goal of combating deforestation worldwide and thus contributing to the preservation of biodiversity and the containment of climate change. The automotive industry acknowledges its responsibility to make an active contribution here.”
Even if the basic goal is shared, the automotive industry sees an urgent need for clarifications and adjustments to the regulation in order to ensure practical implementation and avoid unnecessary bureaucracy. The current version of the regulation cannot be implemented: “It is crucial that the regulation is designed in such a way that it brings real improvements, does not place one-sided international responsibility on the European automotive industry and at the same time does not burden companies with unclear requirements and excessive bureaucracy. If this is not guaranteed, an extension of the implementation deadlines should be considered,” Müller continued. “The current draft brings with it new disadvantages in terms of international competitiveness that must be avoided at all costs,” she stressed. The VDA has published a current position paper with the most pressing problems and solutions to this issue.
EU information system not yet mature
There are currently numerous open questions that make the practical application of the regulation difficult. For example, the EU information system, which is essential for compliance with the new regulations, is not yet technically mature. “Starting the system just two weeks before the start of due diligence obligations is not realistic for the companies at the end of the supply chain. It is therefore not to be expected that all the necessary data will even be available by the end of 2024,” Müller explains.
Moreover, there is a lack of essential guidance, such as the guidance document announced by the EU Commission, which is intended to help companies apply the regulation. The country benchmarking, which is crucial for the risk assessment of products, has not yet been published by the EU. Without this basic information, companies face a significant additional burden without making any additional contribution to protecting forests.
Problems with customs clearance
In addition to the challenges already mentioned, there are still numerous uncertainties in the practical application of the regulation that urgently need to be clarified. For example, the distinction between natural and synthetic rubber is not regulated with sufficient precision, which can lead to problems in customs clearance. The handling of wood used as packaging material also requires clear regulation.
“We call on the European Commission to adapt the regulation as quickly as possible so that companies are able to fulfil their due diligence obligations in a legally secure manner and without unnecessary bureaucracy,” Müller emphasises. Simplifying the regulation and avoiding double regulation are essential to ensure the competitiveness of European companies.
In the event of a delay in providing the necessary information, an extension of the implementation deadlines should also be considered. “It must be ensured that companies have sufficient time to prepare for the new requirements,” Müller said.
SOURCE: VDA
