Ghana and the new EU deforestation rules

Stephane Peeters Vandenberg, Brussels, Belgium
April 1st, 2024

G hana has is recording the fastest deforestation rate in the World. The country has a surface area of 238,530 square meters. In 1992, the Food and Agricutural Organization (FAO) estimates that forest area of Ghana is 9.17 million hectares, accounting for about 40 precent of the total national land. The Ghana Forestry Commission Authorities has catalogued 266 forest reserves split between 204 in the South West and 62 in the Savanna Zone. Ghana also has seven national parks, six resource reserves, three wildlife sanctuaries and one strict nature reserve. The Forestry Commission of Ghana regulates and coordinates forestry policies.

However, Ghana is facing a rapid forest loss. Human causes which include archaic agricultural practices and illegal mining and drounght induced by climage change are the main reasons for the accelerating depletion of forest reserves. In less than two decades (1992-2010), Ghana has lost 2.2 million hectares of forest. Recent satellite data from Global Forest Watch, shows that Ghana had 6.97 million hectares of natural forest in 2010 (covering over 30 percent of its land area). In 2023 alone, the country lost 110 hectares of natural forest, equivalent to 76.3 Mt of CO₂ emissions.

The country is tackling this environmental degradation through domestic legislation and international cooperation. Key aspects of Ghana’s forest legislations align the new EUDR. The country has also signed up to international initiatives against deforestation. In 2019, for example, Ghana started the implementation of the ‟Reducing Emissions from Deforestation and forest Degradation (REDD)”. REDD is a program of the United Nations Framework Convention on Climate Change (UNFCCC). In this framework, the Ghana Cocoa Forest REDD+ program has become the major emission reduction program.

Economic impact

The 2022 annual report from the Ghana Forestry Commission indicates that the country earned US$ 143 million in 2023 (€153.8 million in 2022) from timber export. The sector employs 120,000 people in timber processing. However, according to the World Economic Forum, ‟For decades, Ghana was one of the leading timber exporters in the world but its forest cover has shrunk significantly over the years leaving timber processors in the country contemplating the importation of lumber from neighboring countries and South America” ¹.

In 2022, according to the World Bank, the top partner countries from which Ghana Imports Wood include China, India, United States, Indonesia and Cote d'Ivoire. Ghana exports mostly raw un-processed timber but import a variety of processed and finished wood items. In fact in 2022, Ghana imported more wood and timber of products that it exported creating a deficit. Import amounted to US$377 million.

Enters the .... EU Deforestation Regulation (EUDR)

On n May 31st, 2023, the European Union (EU) adopted Regulation 2023/1115 (or EUDR). This new regulation bans the import and sale into EU countries of commodities and products associated with deforestation and forest degradation. The European Union says that, through this new regulation, it wants to fight deforestation and protect the rights of indigenous peoples and local communities, both in the Union and in supply countries.

The EU argues that the Union’s consumption habits drive deforestation and forest degradation on a global scale. Data show that by 2030, the EU’s consumption and production of agricultural, forest and livestock commodities alone stand to cause the deforestation of 248 000 hectares per year.

Before this regulation, the Commission had implemented several initiatives to address the global environmental crises, some of which specifically target deforestation. Examples include the 2003 Forest Law Enforcement Government and Trade (FLEGT), the 2010 EU Timber Regulation and the new anti-deforestation regulations are part of the 2022 EU Green Deal. Another initiative was the The EU REDD+ Facility which purported to support developing countries in improving land-use governance as part of their efforts to slow, halt and reverse deforestation.

This time around, EU legislators say they conducted a non-complacent diagnosis before enacting the new rules. They found that previous conservation and restoration policies are not halting deforestation, forest degradation, and biodiversity loss. The goal, therefore, is to succeed where other international initiatives have delivered little tangible results.

Compliance with EUDR begins on December 30th, 2024 for large and medium-size companies. The EU expects full compliance from small enterprises from June 30th, 2025.

Definitions and risk classification

Exporters and importers of commodities associated with deforestation will have to prove that their products are deforestation-free. ‟Deforestation-free” means that the relevant products ‟have been fed with or have been made using, relevant commodities that were produced on land that has not been subject to deforestation” after December 31st, 2020. Products that contain or have been made using wood, must have been harvested without inducing forest degradation after 31 December, 2020.

This regulation establishes a three-tier system for the assessment of countries. For that purpose, EU Member States and third countries, or parts thereof, shall be classified into one of the following risk categories:

1. (a) ‟High risk” where relevant commodities do not comply with regulation.

2. (b) ‟Low risk” refers to countries, for which the assessment concludes that there is sufficient assurance that instances of producing non-compliant commodities are exceptional.

3. (c) ‟Standard risk” representing countries which do not fall in either the category ‟high risk” or the category ‟low risk”.

The rate of deforestation and forest degradation determines the classification. The EU will also integrate the rate of expansion of agricultural land for relevant commodities and on the production trends of relevant commodities and of relevant products.

Unlike previous initiatives against deforestation, which were based on a voluntary participation the EUDR is a law applicable to every stakeholders and in all jurisdictions where the EU laws are enforced. In other words, any organization selling commodity in the EU market or exporting it must carry out due diligence, document all transactions in a transparent, informatively and traceable manner, throughout the entiresupply chain.

The new regulations will cover the following commodities:

Livestock

1. • Cattle – live cattle, processed meat and finished products (wearables, furnitures)

Agricultural commodities

1. • Cocoa – raw cocoa beans, paste, butter, powder and chocolate products
2. • Palm Oil – nuts, kernels, palm oil, fatty acids containing palm oil, glycerol, tyres, fiber
3. • Coffee – roasted, unroasted and decaffeinated coffee, and substitutes containing coffee in any form
4. • Soya – soya beans, meal oil and residues, including oilcake

Industrial commodities

1. • Rubber – natural rubber, processed rubber, vulcanized rubber, finished products for example tires and clothing
2. • Timber – logs, processed wood, furniture, paper and packaging

Compliance process in Ghana

Ghana produces and exports to the EU at least six commodities that fall within the scope of the EUDR. They are: cocoa, coffee, palm oil, timber, rubber and soya. Ghanaian authorities, importers, producers, and manufacturers will be responsible for the compliance of these products.

The compliance process begins with the establishment of a verifiable and effective process that encompasses the respect for the rights of indigenous peoples. Then, data and information on due diligence must include documents on the origin, input, ‟geo-location” of the commodity and the derivative products. Geolocation means the geographical location of a plot of land, its latitude, and longitude coordinates.

These new rules apply to any natural or legal person who imports the relevant commodities or products into the EU market. They also apply to distributors, suppliers from and to the EU market.

Ghana is also responding to changing global environmental regulations with long term solutions which involve a vast program of reforestation. Data from the Forestry Commission shows that it has replanted 563,269 hectares of forest between 2017 and 2022.

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