Meat companies buying cattle from illegally deforested areas of Brazil will be denied credit by Brazilian banks, according to South American media reports.

The change is in line with new EU regulations intended to protect rainforests. Febraban, Brazil’s bank federation, issued a 'sustainability standard' for the sector which required slaughterhouses to adopt a tracking system to monitor its entire supply chain in the Amazon region and Maranhao State by December, 2025.

READ MORE: Russia re-opens Brazilian beef imports after BSE scare

The Scottish Farmer: Brazilian banks are going to limit credit to abattoirs buying cattle from illegally deforested areasBrazilian banks are going to limit credit to abattoirs buying cattle from illegally deforested areas

The new rules will affect both direct and indirect suppliers of cattle. The world’s biggest meatpackers, JBS SA and Marfrig Global Foods SA, have already committed to not buy cattle from indirect suppliers linked to Amazon illegal deforestation by 2025 and already do not buy direct purchases from areas illegally cleared.

But, the new standards have been rejected by Abiec, the Brazil beef exporting lobby, which said it is a double standard by the banks, as landowners do not face the same requirements for financing.

In an email to its members, it said: “It is important that banks adopt the same environmental requirements for all account holders, including owners of rural areas.” Abiec stated that around 20,000 ranchers had been banned from selling cattle to members due to illegal environmental practices.

READ MORE: Live Brazilian cattle exports banned following judge ruling

Currently, 21 banks have signed the protocol and Febraban warned that funding activities linked to deforestation posed a rise to any bank’s ability to raise credit, as well as its reputation and ability to operate. The EU already requires exporters to prove agricultural commodities, including beef, soya and coffee, did not contribute to deforestation.