THE ORIGIN OF THE “GERMAN TREE TAX” (1990s → 2026)

A compliance system created in Europe. A cost burden paid by Latin America.

Introduction: A system created far from Latin America

The so-called “German Tree Tax” did not originate in Latin America. It emerged in the early 1990s, when Germany—a country with very little actual production of forest resources—became the political and administrative center of a new environmental movement.


Activist groups, NGOs and European regulators designed the first global forest verification system.


Thirty years later, that same system has become a mandatory cost for Latin American manufacturers producing diapers for Latin American families, even when those products They're not even exported.

Activist roots of the 90s: Germany exported rules, not wood

Germany did not export wood. Germany exported standards.


The original idea was simple: “to give consumers confidence that wood products came from well-managed forests.”


But the model evolved rapidly:

  • NGOs defined the standards
  • The audits controlled the permits
  • European administrators set the compliance cycles

    • LATAM manufacturers —who do not own forests or control the forestry chain— never had a voice in this system.

Expansion phase (2000–2020): The birth of the compliance industry

What began as a small eco-label ended up becoming a global bureaucracywhich requires:

  • Constant audits
  • License renewal
  • Traceability documentation
  • Consultant interpretation
  • Quotas calculated by volume, not by risk


    • The diaper industry in Latin America grew. But so did the revenue flowing to Germany, taken directly from Latin American manufacturers.

    

    For OEM-Cs, this became a invisible productivity tax.

European regulatory tie-down (2025–2026): The activist model becomes law

Europe tightened its environmental laws. The activist framework of the 1990s was integrated into:

  • Deforestation regulations
  • Digital traceability rules
  • Mandatory risk assessments
  • Geolocation requirements


Although LATAM diapers are sold within LATAM, the octopus supply chain Yes, it is subject to these European rules. Therefore, LATAM ends up paying for a system over which it has no control.


Europe writes the rules. LATAM pays the bill.

Why the burden falls on Latin America

The administrative engine is in Germany. The fee system is designed in Germany. The audit ecosystem operates from Europe.


And yet:

  • LATAM pays 100% of recurring fees
  • LATAM absorbs the octopus's premiums
  • LATAM carries the documentation
  • LATAM faces delays, penalties and recertifications


For a plant that produces 50–100 million diapers per month, this functions as a tax on the 1.5% to 3% of their sales, not being a government tax, but a foreign administrative cost.

What the LATAM industry is calling today the “German Tree Tax”

The “German Tree Tax” is not a formal tax. It is the cumulative financial impact of operating with tree-based inputs:

  • Quotas based on certified volume
  • Audits and consultants
  • Maintaining traceability
  • Octopus cousins
  • Annual license fees


    • All triggered by a single factor: the presence of tree fiber.


    The system extracts millions each year from LATAM producers, without improving local forests, local industries, or LATAM communities.

The structural solution: Treeless inputs

TreeFree Core and ecoVerified cannot trigger any forestry requirements.

That means:

  • No additional documentation
  • Without audits
  • No license renewals
  • Without octopus cousins
  • No German Tree Tax


Zero trees = zero administrative burden.

LATAM maintains its productivity, margin and competitiveness.


TreeFree Core turns a 30-year-old problem into an industrial advantage for the region.