BELGIUM – The EU’s new sustainability regulations are significantly affecting industries both within and beyond its borders.

The wood industry, in particular, is facing increasing pressure to adopt sustainable practices in wood production, processing, and sales. While these regulations aim to promote environmentally friendly operations, they also require effort across the entire value chain.

The European Union introduced the deforestation regulation (EUDR) in June 2023, with an 18-month transition period. The main goal is to reduce deforestation and forest degradation. The regulation requires companies to prove that the wood they handle comes from sustainable sources and has not been harvested from primary forests. This involves comprehensive documentation across the entire value chain and maintaining verifiable records for at least five years.

The entire value chain for wood-based products is impacted. Until national legislation is established, there are uncertainties about how the EUDR will be implemented. The responsibility for compliance can vary depending on the timber trade circumstances. Forest companies buying wood must meet the regulation’s requirements, while in procurement situations, the forest owner must either carry out the Due Diligence Assurance or authorize the operator to do so.

Another important regulation is the Corporate Sustainability Reporting Directive (CSRD), which aims to standardize sustainability reporting across industries. The CSRD is being gradually introduced to companies of various sizes, with some needing to include it in their 2024 financial year reports. This directive is guided by the European Sustainability Reporting Standards (ESRS). As sustainability requirements become stricter, companies will need to invest significant effort in collecting and maintaining the necessary data to comply with these new standards.