COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010
Date: 2021-11-17
Institutions: Directorate-General for Environment, European Commission
Subjects: cattle, commodities market, deforestation, export (EU), market approval, reduction of gas emissions, soya bean, tropical plant, vegetable oil, wood product

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   EUROPEAN COMMISSION  Brussels, 17.11.2021  SWD(2021) 325 final  COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a  REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010     {COM(2021) 706 final} - {SEC(2021) 395 final} - {SEC(2021) 396 final} - {SWD(2021) 326 final} - {SWD(2021) 327 final} - {SWD(2021) 328 final} - {SWD(2021) 329 final}  
 
 
Subsidiarity Grid 

1.  Can the Union act? What is the legal basis and competence of the Unions’ intended action? 

1.1 Which article(s) of the Treaty are used to support the legislative proposal or policy initiative? 

EU competence to act in the area of deforestation and forest degradation stems from the articles of 
the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU)  related  to  the  protection  of  the 
environment (Articles 21 (2.f) and 191 (2) TFEU). Article 21(2.f) requires the Union “to help develop 
international measures to preserve and improve the quality of the environment and the sustainable 
management of global natural resources, in order to ensure sustainable development”. Article 191 (2) 
requires the Union policy on the environment to aim at a high level of protection.  

Article 192 (1) states that “the European Parliament and the Council, acting in accordance with the 
ordinary  legislative  procedure  and  after  consulting  the  Economic  and  Social  Committee  and  the 
Committee of the Regions, shall decide what action is to be taken by the Union in order to achieve the 
objectives referred to in Article 191”.  

1.2 Is the Union competence represented by this Treaty article exclusive, shared or supporting in 
nature? 

In the case of environment, the Union’s competence is shared.  

Subsidiarity does not apply for policy areas where the Union has exclusive competence as defined in 
Article 3 TFEU1. It is the specific legal basis which determines whether the proposal falls under the 
subsidiarity control mechanism. Article 4 TFEU2 sets out the areas where competence is shared 
between the Union and the Member States. Article 6 TFEU3 sets out the areas for which the Unions 
has competence only to support the actions of the Member States. 

2.  Subsidiarity Principle: Why should the EU act? 

2.1 Does the proposal fulfil the procedural requirements of Protocol No. 24: 

-  Has there been a wide consultation before proposing the act? 
- 

Is there a detailed statement with qualitative and, where possible, quantitative indicators 
allowing an appraisal of whether the action can best be achieved at Union level? 

The  Open  Public  Consultation  (OPC)  carried  out  by  the  Commission  in  2020  received  nearly  1.2 
million  responses  .A  majority  of  stakeholders  agreed  on  the  need  of  an  EU-level  intervention  to 
reduce the EU’s contribution to global deforestation and forest degradation. Most stakeholders also 
agreed on setting out an EU deforestation-free definition as a requirement of the policy intervention. 

In  terms  of  policy  measures,  the  OPC  showed  strong,  support  for  legally  binding  options 
(deforestation-free requirement, mandatory due diligence, mandatory public certification, etc.) while 
soft,  voluntary  measures  like  voluntary  due  diligence,  voluntary  labelling  or  voluntary  private 
certification  were  considered  to  lack  in  effectiveness.  The  overwhelming  majority  of  qualified 

1 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E003&from=EN  
2 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E004&from=EN  
3 https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E006:EN:HTML  
4 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12016E/PRO/02&from=EN  

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stakeholders — businesses associations and NGOs — supported a mandatory due diligence regime, 
although the preferred details of this system vary from one respondent to another. 

The detailed conclusions from the stakeholder consultations, including the Feedback on the inception 
impact assessment, the findings of the OPC and the outcome of targeted stakeholder consultation, 
are included in Annex 2 of the Impact Assessment. 

2.2 Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the conformity with the 
principle of subsidiarity? 

The  main  drivers  of  deforestation  and  forest  degradation  are  linked  to  both  the  EU  market  and 
international trade. The supply chains for the products covered by the initiative are international and 
very often  global.  The  experience  the  EU  has  acquired  in  dealing  with  complex  supply-chain  issues 
(e.g.  stemming  from  the  illegal  logging  related  legislation  for  example)  is  instrumental  to  ensure  a 
level  playing  field  for  operators  at  the  EU  level  in  terms of  requirements  to  be  met  before  placing 
products (commodities and derived products) on the EU market for the first time. 

The  explanatory  memorandum  and  the  impact  assessment  (chapter  3)  contain  a  section  on  the 
principle of subsidiarity (see question 2.2 below.) 

2.3 Based on the answers to the questions below, can the objectives of the proposed action be 

achieved sufficiently by the Member States acting alone (necessity for EU action)? 

In  the  absence  of  a  harmonised  approach,  measures  restricting  internal  trade  would  be  taken  by 
several Member States, hence disrupting the functioning of the internal market. This would have a 
serious impact on the functioning of the EU market, jeopardize the ability of European Operators to 
source products/commodities in the scope of this Regulation as well as undermine the credibility of 
EU measures. 

2.4 Based on the answer to the questions below, can the objectives of the proposed action be 

better achieved at Union level by reason of scale or effects of that action (EU added value)? 

The  absence  of  applicable  rules  at  the  European  level  put  responsible  business  operators  that  are 
ready  to  clean  up  their  supply  chains  at  a  competitive  disadvantage  and  rewards  unsustainable 
behaviour. Therefore, while environment is a competence shared between the EU and the Member 
States,  EU-wide  measures  are  necessary  to  ensure  a  common  understanding  of  deforestation  and 
forest degradation-free supply chains and to increase the transparency of such supply chains.  

In so far as the present initiative also covers imported goods, action at Union level is more effective 
than action at national level as it prevents possible adverse impact on the functioning of the internal 
market and on trade aspects. EU action can therefore complement and strengthen national efforts of 
Member States. Were the EU not to act, the problem of deforestation and forest degradation related 
to EU consumption would persist and further deteriorate. This could negatively affect the EU's efforts 
in the field of global biodiversity protection and climate change.  

Therefore, action at EU level is required to address EU consumption footprint and international trade 
issues in a coordinated and harmonised way while providing the legal certainty and clarity, necessary 
for the proper functioning of the EU market.  

3.  Proportionality: How the EU should act 

3.1  Does the explanatory memorandum (and any impact assessment) accompanying the 

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Commission’s proposal contain an adequate justification regarding the proportionality of the 
proposal and a statement allowing appraisal of the compliance of the proposal with the 
principle of proportionality? 

With  this  legislative  initiative  the  EU  steps  up  its  action  against  deforestation  and  forest 
degradation  by  establishing  a  regulatory  framework  which  aims  to  be  ambitious  and 
implementable, and which incentivises the transition to sustainable supply chains in all producing 
countries, within or beyond the EU. This would make the EU a credible global standard-setter. The 
minimum monetised benefits clearly offset the costs. The initiative is also in line with the gravity of 
the problem it aims to tackle, as well as with the priorities of the European Green Deal. 

legislative 

This 
initiative  aims  at  minimising  EU  contribution  to  deforestation  and  forest 
degradation.  This  objective  will  be  achieved  by  establishing  a  tiered,  mandatory  due  diligence 
system, relying on a deforestation free definition, combined with a benchmarking system and a list 
of contravening operators. As analysed in the Impact Assessment, it is expected that this measure 
will  be  the  most  effective  curbing  EU-driven  deforestation  and  the  most  efficient  among  those 
screened in preparation of this initiative.    

3.2 Based on the answers to the questions below and information available from any impact 
assessment, the explanatory memorandum or other sources, is the proposed action an 
appropriate way to achieve the intended objectives? 

The  proposed  legislative  initiative  will  cover  a  range  of  products/commodities  associated  with 
deforestation  and  forest  degradation  and  will  be  based  on  a  definition  of  deforestation-free 
product/commodity.  Through  an  expanded  product  scope  and  by  adding  the  requirement  of 
“deforestation free” to the current system based on legality, the proposed measures will address 
the main driver of deforestation, i.e. agricultural expansion, thereby reducing the EU’s contribution 
to deforestation and forest degradation. 

In terms of policy measure, the legislative proposal envisages a benchmarking system and a list of 
contravening operators combined with a tiered improved mandatory due diligence system, relying 
on a deforestation-free definition. This option would ensure that the EU puts in place a regulatory 
framework  that  is  both  very  ambitious  and  implementable,  while  incentivising  the  sustainability 
transition in all countries, within or beyond the EU, making us a credible global standard-setter. 

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