Navigating the EUDR: timber trade in the Congo Basin
As the timber sector in the Congo Basin prepares for the European Union Regulation on Deforestation-free Products (EUDR), affected stakeholders have voiced their opinions about the opportunities, challenges, and needs the regulation creates. The EUDR will come into effect at the end of 2025, from which point businesses wishing to place products containing a relevant commodity[1], such as timber, onto the EU market will need to demonstrate that the commodity is legally sourced and not linked to destruction of forests at any point in the supply chain. With this requirement, the EUDR aims to ensure that EU sales of products containing timber do not lead to forest destruction in countries like Cameroon and Gabon, where timber is grown. Demonstrating that timber meets this requirement will require significant effort that will impact stakeholders throughout timber supply chains.
In October 2024, some of the business, policy, academic and NGO stakeholders from the timber sector in Cameroon and Gabon came together to describe the impact the EUDR is already starting to have, and the risks and opportunities they expect the regulation to create. Cameroon and Gabon lie in the Congo Basin, which is an important case study for the EUDR. The basin’s forests are critical for climate regulation, and the world’s second largest rainforest is an important hotspot for biodiversity. Like most rainforests, the Congo Basin faces increasing pressure from timber extraction and commodity production and trade, which are vital sectors supporting economic development. The following four key themes emerged from the stakeholder discussions.
Uneven business readiness for the EUDR
There isa clear divide in timber supply chains between large (often European-owned) companies with established certification systems and smaller, locally owned businesses with limited resources and capacity. Many larger companies view the EUDR as a manageable opportunity because they already have systems in place that will help them comply. By contrast, many smaller operators expect the extra administrative work to be a significant challenge. Some are considering shifting their exports to less regulated markets, while others are exploring partnerships with bigger companies to help them navigate the new requirements.
The EUDR is already reshaping timber supply chains
The EU remains the most profitable market for timber exporters in the Congo Basin, but it presents heightened barriers to entry. Asian markets are easier to access but offer lower prices. Meanwhile, a growing inter-African timber market is opening up new trade opportunities that could help retain economic value within the region. Since exporters have access to non-EU markets, some stakeholders were concerned that a “two-tier” system could develop that would undermine the forest-protecting aim of the EUDR. In one tier, timber that is demonstrably not linked to forest destruction would be exported to the EU, while in the other tier, timber that is linked to forest destruction would be exported elsewhere. In this scenario, known as market segregation, the EUDR may not significantly reduce forest destruction but could mainly influence where timber is sold.
Barriers to compliance and enforcement
Stakeholders in Cameroon and Gabon identified multiple barriers to complying with and enforcing the EUDR. One challenge for compliance is that every timber product placed on the EU market must be fully traceable – from the exact harvesting plot, through any processing, to the final product – to prove it is not linked to forest destruction. Another challenge can be bureaucratic delays in obtaining the harvest and trade permits, which are needed to prove the timber was legally harvested in the country of origin.
Enforcement of the EUDR could be limited by the capacities of governments and institutions in producer countries like Cameroon and Gabon. Another significant risk stakeholders identified was “commodity laundering”, whereby illegal timber could be processed in a third country before being placed on the EU market as a final product, thereby evading the EUDR restrictions. This is because, while raw materials are easier to trace and label, there is often minimum information on them embedded on the final products that utilize them—the example of imported wooden furniture from East Asia was used, where the country of manufacture is known, but the origin of the timber in it is not. This opens a window for non-compliant timber to be diverted into other markets, and ultimately enter the European market as a finalised product.
Building capacity for the EUDR can deliver benefits for all parties
The timber supply chain stakeholders in Cameroon and Gabon feel burdened by the administrative requirements of the EUDR, which is being implemented with limited consultation to date, and will face challenges if they want to comply. However, actors across the board believe that with appropriate resources and the right incentives and support mechanisms in place, both the public and private sector stakeholders could overcome these challenges.
The EUDR provides an opportunity to enable sustainable forest governance that can support economic development in the Congo Basin. However, realizing this potential will require the EU and EU-based companies to provide resources and assistance to producer countries to facilitate implementation. EU actors with leverage and resources must proactively provide incentives and support mechanisms. There is a particular need for targeted technical and financial support for small and medium enterprises to build capacity in sustainable forest management. The promise of higher EU market prices provides an incentive, but without special attention, smaller enterprises may become marginalized and be unable to comply with the requirements of the EUDR. For government regulators and monitoring agencies in producer countries, increased resources and capacity to oversee forest management would enable environmental and economic benefits to be realized through better protection and management of natural resources while also making it easier for actors across the supply chain to meet their legal obligations. Additionally, EU policymakers will need to address concerns about weak enforcement capacity and potential commodity laundering through third countries to prevent undermining the EUDR’s effectiveness and further disadvantaging compliant operators.
Authors (alphabetical): Louis Brijmohun[2], Heli Sihvonen[3]and Juan Manuel Vargas[4]
Reviewers (alphabetical): Scilla Alecci[5], Alok Jha[6], Madeleine Ngeunga[7], Vinicius Sassine[8], and Rina Tsubaki[9]
[1] The EUDR applies to cattle, coffee, cocoa, palm oil, rubber, soy, and timber, and any products containing any of these commodities.
[2] The United Nations Environment Programme World Conservation Monitoring Centre (UNEP-WCMC)
[3] The United Nations Environment Programme World Conservation Monitoring Centre (UNEP-WCMC)
[4] The United Nations Environment Programme World Conservation Monitoring Centre (UNEP-WCMC)
[5] International Consortium of Investigative Journalists (ICIJ)
[6] The Economist
[7] Pulitzer Center
[8] Folha de S.Paulo
[9] European Forest Institute