16th December - The Tropical Forest Alliance in China has issued two reports on commodity-driven deforestation at an event taking place during COP15 in Montreal. The first report, that primarily focuses on the private sector, lays out how companies in China who operate in this sector can use technology, finance and policy to transition towards more sustainable soft commodity supply chains. The second report – a policy study – focuses on the six priorities required to accelerate regulation to move towards deforestation-free soft commodity supply chains.
More than 70% of the food industry’s emission sources come from land use, more specifically from agriculture and deforestation, and China is now the world’s largest importer of soybeans, beef and timber, and the second-largest importer of palm oil. Chinese companies, who drive demand for agriculture and forest products, have an opportunity to both contribute to and gain from the ongoing transition towards green supply chains of soft commodities, through close collaboration with large multinational traders and commodities producers in the upstream international supply chain.
The report –Preventing Global Deforestation: China's Actions and Opportunities – provides guidance for Chinese companies in the following ways: how to use breakthrough technological solutions; how to mitigate financial risks and unlock new investment opportunities; and how to create consumer awareness to drive demand for sustainable production. It was published in collaboration with the China Sustainability Tribune.
The paper lays out three pathways to reverse commodity-driven deforestation. Firstly, it proposes using technology – such as digital ag tech, blockchain and plant-based alternatives – to improve production efficiency, traceability and transparency. Secondly, it points to various financial aspects – such as establishing a green finance incentive mechanism for soft commodities – to promote transformation. And thirdly, it explains the role played by consumer awareness to drive more demand for sustainable production.
Chen Liming, Chairman of Greater China at the World Economic Forum, said: "The achievements and efforts presented in this white paper reflect China's belief in building an ecological civilization and express its vision and aspirations for building a community of life. We hope to use this white paper as a starting point to spur more Chinese companies in the soft commodities sector to take action to prevent and avoid deforestation and land-use change in procurement and supply chains.”
The policy report – titled Policy Study of Global Green Value Chains: Action Plan for Greening China’s Soft Commodity Value Chains – was published in partnership with the Foreign Environmental Co-operation Centre of the Ministry of Ecology and Environment (FECO) and the World Resources Institute. It builds on the recommendations of the China Council for International Co-operation on Environment and Development (CCICED) that was released in 2020, and draws on input from more than 50 experts to identify action pathways to support the implementation of a national strategy in China for sustainably-sourced soft-commodity value chains.
The regulatory environment in China determines market sentiment, and this report lays out the six strategic priorities that should inform any regulatory change – and 20 different actions needed to move towards a national regulatory strategy on deforestation-free commodity value chains. Alongside suggestions on domestic priorities, it highlights the importance of the need for stronger policy dialogue, trade agreements, international aid and capacity building programmes. This is particularly relevant for strengthening bilateral and multilateral relationships between tropical forest producing countries and demand markets, like China, the EU and the US.
TFA’s Executive Director Jack Hurd said: “Shaping a positive policy trajectory to align with global trends takes ambition and courage. It is critical that tropical forest countries in Latin America, South East Asia and Africa can collaborate with important demand markets such as China (and others). This work on policy advancement and regulatory alignment must be done in a mutually reinforcing way – if we are to move towards taking deforestation out of soft-commodity supply chains while maintaining livelihood improvements for smallholders and Indigenous peoples.”