The European Union’s deforestation regulation, which requires supply chain due diligence for products linked to deforestation — including soy, beef, palm oil, wood, and cocoa — creates compliance obligations for Japanese exporters to Europe and for Japanese importers of products from countries affected by the regulation.
Japan’s trading companies have significant exposure to Southeast Asian palm oil supply chains and South American agricultural supply chains that will require documentation and verification systems that many suppliers currently lack. The compliance cost is real; the alternative — loss of EU market access for non-compliant products — is more costly. This is a permanent feature of trade with Europe, not a transitional measure.
Analysis based on public reporting. Global Watch Japan.
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