The Thai Rubber Association (TRA) has followed up on the progress of the EU Regulation on Deforestation-Free Products. TRA found that the regulation will apply to the companies in the EU (27 countries) that use or import products that might be related to deforestation based on scientific evidence. The regulation covers various commodities, such as cattle, wood, palm oil, soy, coffee, cocoa, and some processed commodities, such as leather, furniture, and chocolate. The law requires companies that use or import these commodities to clearly identify the origin of the goods as legally manufactured following those countries' laws. The EU expects that the regulation on deforestation-free products will reduce deforestation and carbon dioxide by at least 31.9 million metric tons per year.

In the current state of the EU regulation on deforestation-free products as of July 2022, the relevant EU authorities have jointly proposed as follows: 1) consider expanding the scope of products to include pigs, sheep, goats, poultry, maize, rubber, charcoal, and printed paper products; 2) increase respect for human rights and indigenous people's rights; and 3) the European Commission should consider the law within two years to expand the scope of the product to include sugar cane, ethanol, and mining products. Moreover, they should consider the law within one year to expand the scope of the law to include other ecosystems such as grass forests, freshwater swamp forests, and wetlands. The European Parliament is scheduled to vote in September 2022 as a gesture for discussions with the EU Council and the EU Commission before concluding a regulation for further enforcement. The guidelines are expected to be effective by 2023, with a transition period of one to two years. However, the essence can be changed through the EU legislative process because there are still concerns about smallholders and the cost of due diligence. Furthermore, the law has a review mechanism to allow additional products to be added.

The committee of the Thai Rubber Association (TRA) considered and has the following opinions: 1) support the EU regulation on deforestation-free products to prevent deforestation, which is sustainable development following the United Nations (UN) Sustainable Development Goal (SDG) and Bio-Circular-Green Economy Model (BCG Model); and 2) oppose including natural rubber in the scope products of the EU regulation on deforestation-free products because the due diligence process can affect smallholder costs. Moreover, due diligence process with 2 million smallholders in Thailand can be extremely time-consuming and difficult to implement because there must be mechanisms and tools, and technology and abundant funding from the government is required. In addition, Thailand is confronted with economic problems due to COVID-19 and geopolitical issues. If the EU Parliament includes rubber products within the law, it will severely affect Thailand's smallholders, causing them to be unable to sell rubber. Besides, it might cause trade barrier issues, which affect low rubber prices as a whole.

The Thai Rubber Association (TRA) will monitor the progress of the EU Regulation on Deforestation-Free Products, EU environmental law, trade law, and other relevant laws to inform our TRA members and all related parties to prepare for the laws that might affect Thailand's rubber and rubber-based products exported to the EU. Additionally, it is to raise Thailand's environmental standards in a holistic approach for economic and environmental sustainability in the future.

Mr.Chaiyos Sincharoenkul

President

The Thai Rubber Association