The Netherland’s Trade in Forest Risk Commodities

If the UK is a nation of shopkeepers, the Netherlands is a nation of traders.

Alauda, working with WWF Netherlands, recently published an analysis of the Netherlands’ imports, exports and consumption of eight deforestation and conversion risk commodities: soy, palm oil, maize, coconut, cocoa, coffee, beef & leather and timber.

The Netherlands’ overseas land footprint for imports of these eight forest risk commodities is an estimated 17.3 million hectares a year. This is equivalent to four times the Netherlands’ land area. The largest contributions to this land footprint are imports of timber (5.1 million hectares each year), beef & leather (3.9 million hectares), soy (2.7 million hectares) and cocoa (2.5 million hectares). The Netherlands is a significant global actor in the trade of many of these commodities. For example, it imports 23% of all cocoa produced globally.

Apart from timber and maize, over half of imports (or imports plus domestic production where applicable) are then exported, mostly within Europe, and often after additional processing or embedded within exported products. For example, 85% of the Netherlands’ soy imports, 63% of coconut and 59% of imported oil palm products are exported to other countries. This emphasises the Netherlands’ critical role as an entrepôt for forest risk commodities into Europe.

Forty-two percent of this external land footprint – over 7 million hectares – is from countries that have a high or very high risk of deforestation, poor rule of law and a poor record of labour rights. The majority of imported palm oil (86%), cocoa (80%) and coffee (69%) are produced by countries assessed as high or very high risk. The greenhouse gas emissions from land use change of the imports for the six commodities for which estimates could be made (soy, palm oil, maize, cocoa, coconut and coffee) totalled 43.6 million tonnes of CO2-equivalent each year between 2017 and 2021. This is equivalent to 24% of the Netherlands’ domestic greenhouse gas emissions in 2019. Just three commodities – soy (50%), cocoa (26%) and maize (16%) – are responsible for over 90% of these emissions.

The European Commission is developing legislation making it mandatory for companies to conduct due diligence on deforestation and degradation associated with the commodities they place on the European market for the first time. Given the Netherlands’ pre-eminent status as the entrepôt for forest risk commodities into Europe, the deforestation regulation will have a profound effect on companies operating in the Netherlands – obliging them to be truly vigilant and transparent about the environmental harms embedded within their global supply chains. However, the proposed EU legislation does not go far enough: it only includes deforestation and not conversion of all ecosystems (as of 13 September now extended to shrubland, bushland and other wooded land, but not grassland or wetlands) and excludes some of the commodities that are associated with deforestation and conversion. A robust legal framework is an important starting point to motivate businesses to reconsider their impact on deforestation and conversion, yet leading companies are likely to use this opportunity to continue their efforts beyond the legal minimum requirements and eliminate deforestation, conversion, and human rights abuses from their supply chains and those of their suppliers.

Thanks to the efforts of the WWF team, the media reach of the report was an estimated four and a half million people, excluding social media. The report caused questions to be raised in the Dutch parliament with a formal response from the government imminent. We hope that this will translate into further strengthening of the EU deforestation regulation at this critical moment in their development.