Risk profiles for deforestation-free and legal supply-chains of wood-based products

The European Union adopted the Deforestation Regulation (EUDR) to exclude certain agricultural and forest products from its market, if no unambiguous proof exists that products do not originate from recently deforested or degraded forest areas.This paper presents a method for the assessment of the magnitude of the exposure of the global trade in wood-based products to deforestation and legality risk. This is achieved by combining international trade data with country-based risk index values. The risk index is inspired on the EU Deforestation Regulation country assessment criteria but can be applied to any trade partnership to assess trade risks along the value chain of wood-based products. The key indicators that are factored into the calculation of risk index values include forest area change, agricultural area change, trends in wood removals, and quality of governance. Quality of governance and the data on forest area change proved to have the strongest influence on the risk index values.The combination of the risk index values with trade data, makes it possible to identify countries', regions' and commodities' inherent risk for deforestation and for legality, which may in turn facilitate scoping of commodities that merit more scrutiny on the basis of respective quantities and values that are tagged to the high-risk group. The method can inform law enforcement with the needed level of sampling and analysis methodology for customs inspections, and it can help economic operators to apply additional layers of due diligence when importing from countries with high-risk classification.