Brussels (Brussels Morning) – US paper makers warn that the EU’s new timber traceability law may disrupt $3.5 billion trade, increasing costs for hygiene products like diapers and sanitary pads.
How Will New EU Law Affect Hygiene Product Costs?
United States-based paper makers are cautioning the European Union that a new law mandating them to trace timber to its origins threatens to disrupt $3.5 billion of trade and raise costs for diapers, sanitary pads and other hygiene products. It will be unattainable to comply with the uncertain EU Deforestation Regulation because pulp supply chains are too diffuse to follow all trees, and there’s usually a two-year lag between the time they’re cut down and when they’re spun into fibre, according to the American Forest and Paper Association.
The US industry is a significant exporter of “fluff pulp,” an absorbent material employed by the likes of Procter & Gamble Co. and Kimberly-Clark Corp. to create personal products. American suppliers satisfy about 60% of the EU’s needs, so any interruption would resonate throughout the union.
What Impact Will the EU Timber Traceability Law Have?
“The EUDR as is presently written will raise the costs, especially for US producers, and it will translate into inflationary coercion in the EU,” stated Mark Pitts, executive director at the paper association. “Is this necessary?” His group desires the law’s implementation, designed for year’s end, delayed while it pushes for the sector to be classified as a low risk to global deforestation. That would exempt producers from the traceability requirement.
US government officials also requested for a postponement, stating in a letter to the EU that the rule posed “critical challenges” to domestic producers.
How Will EU Deforestation Regulation Affect Global Trade?
The EU seeks to cut the 10% of global deforestation — and associated loss of biodiversity — related to its consumption of commodities such as timber, beef, coffee and cocoa. The pending law needs every log, cow and bean entering the area to be traced to their origins, or the bloc will levy hefty penalties. “The EUDR mandates that businesses document the geolocation of all relevant plots of land for items traded in bulk,” stated Adalbert Jahnz, a spokesman for the European Commission. “This requirement is not about outlining each wood fibre to a single plot.”
How Are US Paper Makers Responding to EU Timber Law?
Pampers maker Procter & Gamble and Huggies manufacturer Kimberly-Clark are the leading suppliers of diapers in Europe, while P&G is the largest supplier of menstrual care products, according to data from Euromonitor International. A representative for P&G stated the company complies with applicable regulations and regulations, and it will do so with the EUDR. It also hopes suppliers to do the same through its sourcing guidelines.
There have been some consequences from the law even before it takes result, with several association members having supply contracts derailed, Pitts stated. “It’s already impacting supply-chain contracts for the fall,” he stated, declining to determine the companies involved. “It puts those contracts in jeopardy.”
