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Feeling overwhelmed by the new EU Deforestation-Free Regulation (EUDR)? You’re not alone. Whether you’re a procurement head scrambling to ensure your supply chains meet new sourcing standards, a sustainability leader navigating complex compliance requirements, or a compliance officer facing the pressure of hefty fines, the EUDR presents a significant challenge. So, take a deep breath, grab a cup of coffee (hopefully sourced sustainably!), and let’s navigate the EUDR together.
The new EU Deforestation Regulation (EUDR) will come into force on the 29th of June 2023 and on the 30th of December 2024 businesses will have to comply with all the requirements of the regulation.
This comprehensive set of regulations is designed to combat the drivers of deforestation and forest degradation, both within and outside the EU. The EUDR seeks to address the often-hidden links between the consumption of products in Europe and the deforestation occurring in other parts of the world. By doing so, it strives to eliminate the contribution of EU consumption to global deforestation, setting a new standard for sustainability and ethical trade practices.
Forests act as carbon sinks, absorbing and storing carbon dioxide, a major greenhouse gas. Their destruction contributes to global warming. Furthermore, forests are vital habitats for diverse species. Deforestation disrupts ecosystems, leading to species extinction. Protecting forests is integral to both climate action and the conservation of Earth’s biodiversity.
Deforestation refers to the deliberate and extensive removal of forests and trees from a specific area, often for agricultural, industrial, or urban development purposes. This practice has severe environmental consequences. It contributes to climate change by releasing stored carbon dioxide, disrupts ecosystems, causes habitat loss and fragmentation, endangers biodiversity, and can lead to soil erosion and altered water cycles. Deforestation is a major driver of global environmental degradation and poses significant threats to the planet’s health.
Deforestation refers to the deliberate and extensive removal of forests and trees from a specific area, often for agricultural, industrial, or urban development purposes. This practice has severe environmental consequences. It contributes to climate change by releasing stored carbon dioxide, disrupts ecosystems, causes habitat loss and fragmentation, endangers biodiversity, and can lead to soil erosion and altered water cycles. Deforestation is a major driver of global environmental degradation and poses significant threats to the planet’s health.
The EU’s new deforestation legislation is part of a broader initiative aimed at tackling the environmental and social consequences of global supply chains. Its primary objective is to prevent European companies from importing goods associated with unlawful deforestation and forest decline.
This regulation targets seven commodities: soy, beef, palm oil, wood, cocoa, coffee, and rubber. Several products made from these commodities are also targeted, including leather, chocolate, tires, and furniture.
Under the law, companies are mandated to conduct thorough due diligence assessments on their supply chains, ensuring that imported products adhere to local laws and regulations. Furthermore, companies are expected to evaluate the environmental and social ramifications of their supply chains and take corrective measures to mitigate adverse effects. Additionally, the legislation prohibits the introduction of products into the EU market that are linked to illegal deforestation or forest degradation. Large companies have an 18-month grace period to ensure compliance once the regulation takes effect, after which penalties may be imposed.
The EU Deforestation Regulation (EUDR) represents a landmark step towards combating deforestation and promoting sustainable supply chains. This regulation casts a wide net, encompassing a range of commodities linked to deforestation, including soy, beef, palm oil, wood, cocoa, coffee, and rubber. Its primary objective is to prevent the sale of products associated with deforestation within the EU market.
By imposing stringent due diligence requirements on businesses, the EUDR aims to ensure that commodities are produced legally and sustainably. This includes traceability measures, risk assessments, and the development of deforestation-free supply chains. Compliance with the EUDR is mandatory for companies operating within the EU market, and non-compliance can result in significant penalties.
The EU Deforestation Regulation (EUDR) casts a wide net, affecting any company involved in bringing a specific list of commodities to the EU market. This list includes:
The EUDR applies regardless of whether the raw materials originate from within the EU or elsewhere.
Essentially, if your business deals with these commodities in the EU market, you need to understand and comply with the EUDR.
The EU Deforestation Regulation (EUDR) outlines a series of requirements for companies placing agricultural commodities on the EU market. These requirements aim to promote transparency, traceability, and responsible sourcing practices throughout the supply chain.
This information lays the foundation for transparency and allows authorities to track commodities throughout the supply chain.
By understanding these risks, companies can take targeted action to mitigate them.
These mitigation efforts must be documented in a Due Diligence Statement (DDS) submitted to the EU.
By fulfilling these EUDR requirements, companies can ensure their products meet EU deforestation-free standards and contribute to a more sustainable future.
EUDR compliance involves a rigorous due diligence process for companies to ensure their products are sourced ethically and sustainably, particularly in terms of deforestation.
Country benchmarking for risk assessment under the EU Deforestation Regulation (EUDR) is a process where countries are classified based on their likelihood of contributing to deforestation. The European Commission (EC) assigns countries a risk rating—low, standard, or high risk—which determines the level of due diligence required from operators sourcing from these regions.
The EU takes enforcement of the Deforestation Regulation (EUDR) seriously. To deter violations, regular inspections are conducted. Companies found non-compliant face a range of penalties, varying in severity based on the specific infringement and decided by each EU member state
Remember, complying with the EUDR isn’t just about avoiding penalties; it’s about demonstrating your commitment to a sustainable future.
The EU Deforestation Regulation (EUDR) sets a clear goal: to keep products linked to deforestation off the European market. This means companies dealing with certain commodities like coffee, cocoa, or timber need to take action.
Ensure the commodities you handle haven’t been produced on land deforested after December 31, 2020. Companies must demonstrate their commitment to deforestation-free sourcing through due diligence. This involves identifying potential deforestation risks within your supply chain, and implementing measures to minimize these risks. This could involve sourcing from certified sustainable suppliers or establishing robust traceability systems, integrating with satellite monitoring systems and maintaining clear records of your due diligence process in a Due Diligence Statement (DDS).
Supply chain integrity is important for EUDR compliance, ensuring products are deforestation-free and ethically sourced.
By following these steps, companies can show they’re serious about responsible sourcing and complying with the EUDR. Remember, a deforestation-free supply chain is not just good for the environment; it’s essential for doing business in the EU market.
To ensure compliance with the EU Deforestation Regulation, businesses should:
Traceability plays a crucial role in helping businesses comply with the European Union Deforestation Regulations (EUDR).
TraceX EUDR Platform simplify the process of EUDR compliance by collecting and managing the necessary data, conducting risk assessments, facilitating risk mitigation, and ensuring full traceability of products throughout the supply chain. This comprehensive solution helps companies meet EUDR’s requirements for due diligence, compliance, and transparency effectively.
TraceX allows businesses to collect and store detailed information about the commodities they want to sell, including the origin, quantity, supplier, and country of production. It also captures the essential geographic coordinates of the plots of land where these commodities are produced, a key requirement under EUDR. This information forms the basis for traceability.
TraceX enables real-time monitoring of supply chains, ensuring that products’ journeys are continuously tracked from source to market. Any anomalies or risks are immediately detected, allowing for swift corrective actions, as demanded by EUDR.
Addressing deforestation and promoting sustainability are pivotal in the global effort to combat climate change and protect biodiversity. The EU’s Deforestation Regulation (EUDR) is a significant step toward these goals, offering a model for responsible supply chain management. Achieving a balance between environmental goals and economic interests is essential, and international cooperation is paramount. Both businesses and consumers have a role to play in fostering a more sustainable and eco-conscious world.
EUDR is a set of regulations that aim to combat deforestation by prohibiting the import and sale of products linked to deforestation in the European Union.
Complying with EUDR not only ensures your company’s legal compliance but also promotes sustainability, safeguards the environment, and protects your brand’s reputation.
TraceX’s blockchain-based traceability solutions enable businesses to track their supply chains, providing geo-located, primary data at the farm or plantation level. This helps in collecting verifiable data tied to final products, simplifying compliance, and ensuring transparency.
