The European union deforestation regulation: Implications for the global forest sector

Craig Johnston, Jinggang Guo and Jeffrey P. Prestemon

Forest Policy and Economics, 2025, vol. 173, issue C

Abstract: The European Union Deforestation Regulation (EUDR) aims to prevent deforestation-linked products from entering the EU market. This study assesses the potential impacts of the EUDR on global forest product markets using the FOrest Resource Outlook Model (FOROM), a partial equilibrium model of the global forest sector. We simulate two scenarios: the baseline EUDR, focused on commodity-driven deforestation and urbanization, and an extended EUDR+ scenario, which includes shifting agriculture. The results indicate that high-deforestation countries, such as Brazil, Indonesia, and Malaysia, are expected to face significant reductions in roundwood production and exports, with downstream effects on sawnwood and panel prices. In contrast, low-deforestation countries like Canada and the United States may experience slight increases in production to meet EU demand, but their impact is limited by moderate deforestation rates. The study also highlights the potential for market leakage, where deforestation-linked products may shift to non-EU markets, potentially undermining global environmental goals. Importantly, we find that declining deforestation rates could mitigate some of the impacts, reducing the overall effect of the EUDR on global timber harvests. However, the complexity of global supply chains and enforcement challenges in regions with weak governance could limit the regulation's effectiveness.

Keywords: Timber harvests; European union deforestation regulation; Deforestation rates; And Forest product markets (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:forpol:v:173:y:2025:i:c:s1389934125000413

DOI: 10.1016/j.forpol.2025.103462

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