Thailand advances deforestation-free agri-food system amid EUDR implementation

According to Krungsi Research, the research institute of the Bank of Krungsri Ayudhya, Thai stakeholders in rubber, wood and palm oil industries will be most heavily affected by the EUDR. In particular, smallholder farmers and small and medium-sized enterprises (SMEs). After China, Thailand is the European Union's (EU) second most important supplier of rubber goods. Imports of rubber and rubber products account for 90% by value of exports from Thailand to the EU of EUDR goods. The EU buys 11.5% of Thai rubber and related goods. After rubber, wood/timber and palm oil are the next most significant exports from Thailand to the EU. 

Source: Office of of Agricultural Economics, Thailand and Department of Agricultural Extension, Thailand 

Tight links with downstream producers increase the cost and complexity of verifying these supply chains. However, the rubber industry of Thailand is well organized and is working effectively on the implementation of the EUDR. Law & regulation (policies) are in place to protect the forest and to monitor land ownership to trace the origin of rubber (also other agricultural commodities but rubber is highly well in advance). Also, up to 90% of rubber farmers are registered at Rubber Authority of Thailand (RAOT), a state enterprise under the Thai Ministry of Agriculture and Cooperatives, through which they can get legal documents to certify their products.

The export of paper products is most heavily affected

Compared to the rubber industry, the Thai wood industry may be at an advantage since exporters to the EU are familiar with the EU Timber Regulations (EUTR) since 2013. The most seriously affected wood products will be downstream goods and those produced by related industries. Most notably, this will include paper products (uncoated paper, paperboard, and toilet paper) since these comprise 43.6% of all Thai wood and wood-derived products exported to the EU, followed by tableware and kitchen appliances (9.8% of wood exports), seats (7.3%), furniture (6.6%), carvings, statues, and home decorations (3.8%), and packaging (3.6%). 

However, the quantity of processed wood products to the EU is low. Only 2.9% of particle board, fiberboard, plywood, and veneered products are bound for markets in Europe. This indicates that the direct impact of the EUDR on Thai processed wood (products) will be limited. Nevertheless, Thai players will be exposed to indirect effects, since over 90% of the Thai processed wood is exported to China, the EU’s most important supplier of wooden goods, especially furniture.

Only 2% of Thai palm oil growers meet the sustainability standards

The EUDR will also have an impact on the export of Thai palm oil. In Thailand, a total of 407,225 households cultivates 1 million hectares (6.2 million rai) of palm oil trees across the country. The number of farmers active in the industry has steadily increased since 2004. Small, independent owners manage approximately 80% of the land used for palm oil production. The challenges posed by the EUDR for this sector will be similar to those in the rubber industry. Most Thai palm oil plantations are established on land previously used for other agricultural purposes rather than having been recently deforested, and the growers often have legal rights to this land. However, these farmers generally lack sufficient knowledge of sustainable farming practices. 

Only 2% of Thai palm oil growers have met the sustainability standards set by the international non-profit organization Roundtable on Sustainable Palm Oil (RSPO). The RSPO certifies palm oil plantation practices across various areas, including environmental respect, natural resource conservation, fair labor practices, community impact mitigation, and regulatory compliance. The RSPO standards closely align with the EUDR. Considering that only a few Thai palm oil producers are accredited by the RSPO, considerable work needs to be done to prepare the Thai palm oil sector for the introduction of the EUDR.

Beyond rubber, wood, and palm oil, exports of EUDR-affected goods from Thailand to the EU are very limited. If the EUDR were to include other agricultural products in the future, it would lead to problems for many small farmers in Thailand. It will be difficult for them to provide the required documentation to show that their production does not involve deforestation.

Thai efforts to combat deforestation

According to the 13th National Economic and Social Development Plan (2023 – 2027) and the National Strategic Plan (2018 – 2037) of the Thai Government, Thailand has the ambition to increase its forest area from 16.35 million hectares (31%) to 20.70 million hectares, in other words, 40% of the country’s total area. 

Source: Royal Forest Department, Thailand

The country has implemented numerous steps to address deforestation. Apart from a logging ban in natural forests in 1989, relevant Thai governmental agencies have developed several legislative measures to protect and restore the forests, such as amendments to the Forest Act, National Park Act, Wildlife Conservation and Protection Act, National Reserved Forests Act, Protection Act, National Land Act, Community Forest Act. These amendments include the clarification of forest classifications and types. In addition, awareness and meeting due diligence requirements have been facilitated for a more systematic procedure. Also, the Thai Government has addressed issues with timber legality assurance systems, voluntary partnership agreements, forest certification, geographic information systems (GIS) for land mapping and more.

The EUDR will promote more intensive monitoring of deforestation, increased conservation efforts, and an extension in the total area of forested land. Thailand must strengthen its forest conservation efforts if it wishes to continue trading with the EU. The enforcement of the EUDR will work as an important catalyst, accelerating the involvement of stakeholders across Thailand in forest conservation measures. 

More information

Would you like more information on the EUDR and its effects on the Thai rubber, wood, and palm oil industries? You can visit the country page of Thailand at the website Agroberichtenbuitenland.nl of the Dutch Ministry of Agriculture, Nature and Food Quality. You can also send an e-mail to the agricultural team at the Dutch Embassy in Bangkok: ban-lnv@minbuza.nl.

Footnotes and sources

• Special thanks to Dr. Weeraphat Khunrattanasiri, Faculty of Forestry, Kasetsart University for comments & input (www.ku.ac.th)
• www.krungsri.com  
• www.oae.go.th
• www.dld.go.th
• www.doae.go.th
• www.live-eo.com
• www.bot.or.th
• www.moac.go.th
• www.boi.go.th
• www.pwc.com
• www.thai-german-cooperation.info
• www.moc.go.th
• www.forest.go.th
• www.thainr.com
• www.raot.co.th