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Joint report: Meeting of the 7th CETA Bilateral Dialogue on forest products

October 8, 2024 (by videoconference)

Opening remarks 

Canada welcomed the European delegation to the 2024 Bilateral Dialogue. Canada reaffirmed that the forest sector remains an important contributor to Canada’s economy and discussed environmental challenges facing the sector, such as the increased threat of wildland fire. Canada also highlighted the sector’s opportunities as a growing contributor to the environmental and clean technology products sector. The European Union thanked Canada for efforts and good cooperation in making the 7th CETA Bilateral Dialogue on Forest Products happen. The EU underlined that Canada is a very important trading partner for the EU, with bilateral trade growing significantly since application of CETA. The EU also agreed that forest based products are important part of trade relations.

State of play, discussion and Q&A session: EU Regulation on deforestation-free products (EUDR)

The EU provided an update on the EUDR including the recent announcement of its proposal to delay implementation of the EUDR by 12 months and the publication of new guidance and Frequently Asked Questions (FAQ) documents. Canada noted its appreciation that the EU has responded to Canada and other trading partners’ request for a delay given the high degree of uncertainty and concern about how the regulation will affect bilateral trade. Regarding the FAQ and guidance, Canada noted the efforts made by the EU to address Canada’s concerns as regards the implementation of the definition of forest degradation, but also flagged it still had a number of concerns and questions notably regarding the geo-location requirements. The EU thanked Canada and noted it was open to continued discussions. Canada also asked about the country benchmarking process and that it be kept informed of key dates and opportunities to inform that process.

Update: Renewable Energy Directive (RED) III implementation

The EU provided an update on the most recent amendment to the Renewable Energy Directive, which member states will have until May 2025 to implement. Canada noted its primary concern was the lack of clarity regarding how harvest residuals would be treated under the RED and implementation of the new rules related to the cascading principle. The EU explained that decisions on this would be made at the member state level in advance of implementation. Canada indicated it would continue to seek more information on member state deliberations and thanked the EU in advance for any updates it can provide leading up to May 2025.

Canada’s Compliance Greenhouse Gas (GHG) offset system

Canada presented Canada’s Compliance GHG Offset Credit System, including the Canadian GHG Offset Regulations, federal offset protocols, and the Credit and Tracking System. Canada discussed federal offset protocols for agriculture, forestry, waste and technology-based industries, which can be used as compliance options. The EU expressed interest in carbon removal activities and baseline methods that are set out by the Improved Forest Management federal offset protocols, as well as in an opportunity to consider carbon storage in products as part of the GHG offset system.

Canada’s Renewed Forest Bioeconomy Framework

Canada provided an overview of Canada’s Renewed Forest Bioeconomy Framework, which highlighted seven challenges the forest sector faces to realize the potential of the forest bioeconomy in Canada and examples of priority actions corresponding to each challenge. The EU expressed interest in Canada’s work on standardization of bioproducts and its alignment with the International Organization for Standardization, in the integration of cascading principles in the Renewed Framework, and in Canadian government procurement practices or policies for the use of bioproducts.

Canadian initiatives to accelerate the deployment of biorefineries

Canada presented initiatives to accelerate the development of biorefineries in Canada, including federal and provincial policies, investment and programs that fund domestic research and commercialization, as well as international support for market B2B collaboration, research & development and market development.

Any other business and final remarks

Parties agreed to hold the next BDFP meeting around the same time next year. Canada expressed interest in organizing an inter-sessional dialogue on wood construction and will follow-up with the EU to gauge whether there is reciprocal interest in scheduling this discussion.