A new study by Dutch non-profit organisation Profundo shows that the costs of complying with the EU Deforestation Regulation (EUDR) are on average 0.10% of annual revenues, for large corporations and small-and-medium enterprises (SMEs). While compliance costs were found to be three times higher for SMEs than for larger corporations, they were still only 0.17% for these smaller entities. The study was commissioned with the support of the Tierra Pura Foundation. The potential impact on consumer prices would be even smaller, according to the research: between 0.0001% and 0.07%. “In comparison, this potential price increase is a fraction (between 0.05% and 3.5%) of the acceptable annual inflation target of the European Central Bank (ECB),” said the report. The ECB’s target inflation rate is currently under 2%. In a statement accompanying the report, Profundo said: “These results bring transparency to the debate on the level of costs that compliance with the EUDR and other supply chain sustainability laws would impose on large and small companies.” Last December, the European Council and Parliament agreed to delay the regulation for one year.
