Joint report: Meeting of the 6th CETA Bilateral Dialogue on Forest Products

October 17, 2023 (by videoconference)

Opening remarks EU

The chair welcomed the Canadian delegation and took note of the recent high-level meetings between European Commission President Ursula von der Leyen and Prime Minister of Canada Justin Trudeau, in which climate and biodiversity were among the main points for discussion. Both parties recognise the transition towards a green economy and sustainable development as areas of high importance and will work toward the establishment of a Green Alliance between the European Union (EU) and Canada as well as strengthen their Strategic Partnership on Raw Materials.

Opening remarks Canada

Canada raised its close monitoring of legislative initiatives of importance to the forest sector, and its interest in discussing them in more detail during the session. Canada provided an update on its forest fire season and thanked the EU and its Member States for their assistance in addressing the crisis through the EU Civil Protection Mechanism. Canada reaffirmed that through the forest sector, an incredible potential exists for advancing a circular forest bioeconomy, achieving net zero emissions by 2050, and in meeting our Paris Agreement commitments. Canada also highlighted the significance of innovation through national programs, and the importance of strong and reciprocal trade relationships with like-minded partners. Canada mentioned the importance of continuing to build on and meaningfully engage on this trade relationship and to be vigilant of not inadvertently disrupting the gains that were built through the Comprehensive Economic and Trade Agreement (CETA) initiatives with measures intended to make trade more sustainable and responsive to the respective climate action commitments.

EU update on the revised Renewable Energy Directive

The revised Renewable Energy Directive (RED III) is expected to enter into force by the end of 2023. RED III is an important aspect of the Fit for 55 package. Around sixty percent of renewable energy in the EU is bioenergy with wood as the largest input material. The objective of RED III is to strengthen the sustainability criteria for the use of forest biomass when producing energy.   The EU provided clarifications on the scope of ‘no go’ areas, the cascading principle, and the time frame for the application of RED III. Canada reiterated its support for the regulation's objectives but affirmed its disappointment about the extension of no-go areas to forest biomass, and highlighted the negative impacts that could result if the new rules affect harvesting residuals used in the manufacture of some wood pellets.

EU update on the proposed Packaging and Packaging Waste Regulation

The proposed Packaging and Packaging Waste Regulation is currently being discussed by the Council and the European Parliament. The main objectives of the proposal are to enhance circularity, avoid waste and make packaging sustainable. Proposed measures of the regulation include targets for recycling, design criteria for packaging, and harmonized deposit return systems. Canada raised concerns about the requirements for re-use systems, which create uncertainty for the ability of Canadian pallets to enter EU markets. Parties agreed to continue to engage on this topic in the future.

EU update on the Deforestation-free Regulation

The EU Deforestation-free Regulation (EUDR) entered into force in June 2023. Canada has been updated about the contents of the regulation during previous meetings. Canada expressed concerns about the country benchmarking system, geo-location requirements as well as the definition of forest degradation. The EU explained that geo-location and traceability are key features for the purpose of the regulation and apply in a non-discriminatory way. Moreover, that the definition of forest degradation cannot be changed at least until the foreseen revision of the regulation in five years. Both parties agreed that the monitoring of forest degradation is complex and remains a challenge. Parties also agreed to continue exchanging on this file, including through technical meetings on matters related to deforestation mapping and mutual understanding of geo-location requirements.

Canada update on Standards for Bioproducts

Canada presented its ongoing work on the development of national and international standards for the forest bioeconomy. Work on standardisation is ongoing in the areas of circular construction, carbon storage in building materials, biomass traceability, bioplastics, and forest fire biomass management. Canada also introduced the Bioeconomy Development Opportunity Zone Initiative as a program for a standards-based technical risk assessment that helps local communities to assess and implement biobased projects. The EU expressed interest in further technical meetings on the work on standardization, possibly in the context of CETA.

EU update on the Transition Pathway for the Construction Ecosystem

The EU presented the transition pathway for construction, a non-regulatory policy document drafted in co-creation with Industry, Member States, and other relevant stakeholders. The pathway aims for a resilient, competitive, green, and digital construction ecosystem. Policy recommendations include a well-designed targeting of public funding for the sector, further work on standardisation, and maintaining a coherent regulatory framework.

‘’The Power of Wood’’ - Canada update on carbon sequestration in harvested wood products

Canada presented research on carbon sequestration in harvested wood products showing that climate change could be mitigated by using wood instead of other materials in construction. However, Canada also raised that large scale forest fires induced by climate change risk decreasing the amount of wood that can be harvested.

Other business and closing remarks

Parties reaffirmed their commitment to continue engaging and cooperating under the CETA BDFP. Parties agreed to hold the next BDFP meeting around the same time next year. Canada will host the session in 2024.