Why we need deforestation-free supply chains

Wald von oben

Agricultural expansion causes rapid degradation of ecosystems in countries of the South American economic and political bloc Mercosur (Argentina, Brazil, Uruguay and Paraguay). This endangers its unique biodiversity and harms the global climate. The European Union is an important trading partner and importer of commodities associated with deforestation and ecosystem degradation and therefore holds a significant responsibility to create deforestation-free supply chains and halt deforestation in the Mercosur.

1. What is the problem?
2. What is our aim?
3. What do we do?


Approaches to halt deforestation currently discussed at the European Union

As the world's second largest import market for forest risk commodities, the EU bears a large share of the responsibility for ensuring that global supply chains become deforestation-free. The EU is committed to minimizing its contribution to global deforestation and to promote the consumption of products from deforestation-free supply chains.

Germanwatch evaluated five policy approaches discussed in the EU for their effectiveness to reduce deforestation in global supply chains. You can download our study here.


News and Publications

An overview of Chinese initiatives with recommendations for further strategic advocacy

China's recent international commitments and domestic approaches to mitigating the environmental and social threats associated with global deforestation are plentiful but not sufficient, especially when compared to its peer and competitor, the EU. Our innovative flashcards provide key recommendations on how to strengthen the systematic approach to curate further dialogue and co-operation with stakeholders, especially by highlighting the key ministries' roles in greening the global supply chain. Ultimately, we encourage China to advance its commitment and policy to reduce global deforestation resulting from soft commodity supply chains.

Outcomes of COP28 on Protecting Forests

Deforestation was one of the crucial issues at COP28 in Dubai. The negotiation outcome underscored its importance for the first time with a goal of ending global deforestation by 2030. Notwithstanding, deforestation continues. What exactly was decided at COP28? And where is more action needed?

The role of financial institutions in mitigating supply chain impacts – the case of deforestation

In our new policy brief, we analyse along with Climate & Company and Rechtsanwälte Günther why sustainability due diligence obligations for financial institutions are key to achieving the EU's climate goals. As an example for this tool, we draw on due diligence obligations for financial institutions to avoid financing projects that cause deforestation. In addition, the policy brief presents specific recommendations for regulating financial actors through the EU Corporate Sustainability Due Diligence Directive (CSDDD).

The coverage of the financial sector across a core set of EU regulatory measures

In our new briefing, Germanwatch and the sustainable finance think tank Climate & Company analyse the expected reporting and due diligence obligations in the financial sector across a number of key EU regulatory measures on sustainability. In particular, the briefing focuses on potential obligations resulting from the respective regulatory measures that may help to identify and minimise the risk of deforestation.

First evaluation of the negotiations outcome by Germanwatch

The EU Commission announced the successful conclusion of negotiations on a regulation for deforestation-free products. Companies will therefore soon have to prove that no forest is cleared for the production of certain agricultural goods and wood products. An important step – but the law also has weaknesses. Germanwatch presents an initial assessment.


The expansion of agricultural land for the production of animal feed or palm oil is the biggest driver of loss and degradation of forests and other natural ecosystems worldwide. The EU’s demand for these so-called forest and ecosystem risk commodities plays a significant part in global deforestation linked to international trade.

The EU Commission has recently presented a proposal for a Directive on Corporate Sustainability Due Diligence. The aim of this Directive is to integrate international standards into European law and prevent negative consequences of global business activities. Can the law contribute to ending deforestation in transnational supply chains?
In this publication, we have analysed, compared and evaluated five different approaches to halt deforestation in EU supply chains. To identify the Strengths, Weaknesses, Opportunities and Threats (SWOT) of each approach, we have conducted expert interviews as well as an extensive literature review.
Deforestation, overexploitation and climate change threaten forests around the world. The European Union also plays an inglorious role in this. To change this, the European Commission presented yesterday a legislative proposal to prevent products from forest destruction from entering the EU internal market in the future. At the same time, a general EU supply chain law is being planned. Is the EU Commission duplicating its efforts? No, say Julia Otten and Johannes Heeg from our member Germanwatch and the Initiative Lieferkettengestz.
In Brazil, a railway project threatens to overrun the environment and the rights of indigenous peoples.
A thousand kilometer railway line is intended to make industrial soy production in Brazil cheaper and increase exports. As the second largest buyer of Brazilian soy, the European Union is already partly responsible for the social and ecological damage caused by soy production and for the expansion of cattle pastures in forest areas. Brazil's indigenous population are resisting the construction, pointing to the disregard of their rights and the threat to the climate and biodiversity.

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