A significant amount of US hardwoods are likely being imported into the EU in violation of the EU Timber Regulation (EUTR).

Illegal logging, and other legal risks frequently occur in US wood supply chains. (From timber poaching, to timber sale bid rigging, and failed policy enforcement.)

But, regardless of whether material has been harvested illegally or not…

If wood is placed on the EU market without the importer exercising due diligence, it is a violation of the EUTR.

So, what is adequate due diligence?

A Netherlands court recently provided clarification. Interestingly, this data is unlikely to be present for a significant amount of U.S. hardwood shipments.

What is the EUTR?

The EU Timber Regulation (EUTR) prohibits (a) the sale of timber that has been illegally harvested; and, (b) requires EU importers to exercise due diligence.

According to the EU, due diligence involves, in part, the collection of information on the legality of timber in the supply chain.

A ruling from the Netherlands has provided some clarification on what type of information is required.

EUTR due diligence requirements

On August 4th, 2021 the Netherlands highest court ruled that two EU wood importers broke due diligence requirements when importing Teak from Myanmar.

In its reasoning, the court confirmed a number of EUTR due diligence requirements.

According to the Environmental Investigation Agency (EIA), the main EUTR whistleblower, these are:

  1. origin and legality of timber must be confirmed to the felling location;
  2. companies must confirm traceability (chain-of-custody) of the timber along the entire supply chain;
  3. no relevant documents can be missing.

This type of data is likely absent from a significant amount of US hardwood shipments, which would make their import illegal under the EUTR.

Here’s why….

Ownership of US hardwood forests is highly fragmented

Most US hardwood timber comes from privately owned land that is widely distributed among relatively small landowners.

According to the American Hardwood Export Council (AHEC):

  • Of the total hardwood harvest in 2012, 90% came from privately owned lands.
  • In the Eastern States, which accounted for 98% of all U.S. hardwood harvested in 2012, there are 9.75 million forest owners.
  • Each of these forest owners holds an average of 15 hectares.

The EUTR due diligence requirement that the origin and legality of timber must be confirmed to felling location, combined with the nature of US hardwood logging, which is many “small” timber harvests, means exercising due diligence can have a high data cost (per shipment) for US hardwoods.

As a result, it’s unlikely that data showing negligible risk, starting from the felling location, is being collected, analyzed, and documented at scale.

Map of forest ownership in the United States. Source: Who owns America's forests? Data: Hewes et al 2017

Limited monitoring of US timber harvests and wood flows

US timber harvests and wood flows are not monitored to the extent they are in other countries.

Even questionable timber harvests of public forests receive seemingly minor oversight…

…the timber sale cruising, appraisal, sale preparation, and contracting program fro the Big Thorne Stewardship Contract and Kosciusko Good Neighbor Authority Agreement were not always managed in accordance with the terms of the agreements and Forest Service policy.

FINAL REPORT – ALASKA REGION TIMBER SALES PROGRAM AUDIT. USDA FOREST SERVICE.

See: Two Alaska timber sales were not managed in accordance with USDA Forest Service policy

The lack of monitoring of US timber harvests, and wood flows, means less data is available for timber due diligence.

As a result, chain-of-custody data (traceability) is either unlikely to be available for many US hardwood shipments; and/or, is relatively weak at showing negligible risk.

A logging truck transports logs in western Virginia. Photo: Counselman Collection

‘Anything goes’ attitude towards US Hardwoods

Despite known legal-risks associated with US hardwood species like Black Walnut and White Oak, they appear to be relatively immune from the EUTR.

Consider, for example, that the illegal logging of Eastern Black Walnut is a big enough problem that US Forest Service recently sponsored a Black Walnut tree DNA collection effort. White Oak timber theft is also reportedly on the rise.

And most legal risks in US hardwood supply chains go unnoticed…

A study in the southern Appalachian hardwood region estimated that about 120 instances of timber theft occur each year in just a 20 county area. In the three years prior to the study, in the same 20 country area, there were only 36 criminal cases related to timber theft. In other words, roughly 10% of timber theft cases were being prosecuted.

The hands-off approach to US hardwoods by the EUTR, despite known illegalities, could be due to two key factors. First, the United States doesn’t even use the Lacey Act to enforce laws governing US timber harvests and trade. Second, the EUTR and the Lacey Act seem to be managed by whistleblowers who focuse on tropical wood flows.

(In fact, some of these whistleblowers stood beside the US forest products industry when these timber trade policies were ratified. See: Is the Lacey Act wood amendment to protect U.S. industry?)

The relative immunity of US hardwoods from the EU Timber Regulation means it’s highly likely that less data is being collected regarding US hardwood origin, traceability, and legality (provenance).

Map of showing range of Black Walnut tree DNA collection effort.
Map of showing range of Black Walnut tree DNA collection effort. Source: Adventure Scientists

EUTR risk to US hardwood supply chains

It’s probable that a significant amount of US hardwood is entering the EU market illegally, in violation of the EUTR, without adequate due diligence data, because:

  1. US hardwood timber due diligence data costs are high;
  2. Timber due diligence data for US hardwoods is relatively scarce;
  3. There is limited incentive to collect such data on US hardwoods relative to other species, especially tropical ones.

To date, the EUTR has not been enforced on wood shipments originating in the US.

Will the entities (environmental whistleblowers and EU courts) enforcing the EUTR apply the law to US hardwoods, or will they continue to focus on tropical species?

If the EUTR is enforced on shipments of US hardwoods, US hardwood supply chains could face demand disruptions, higher transaction costs, and elevated levels of legal risk.

This article is open source. If you would like to suggest changes to this document, or have concerns with any of the information presented here, please leave a comment below.

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