EUDR Compliance refers to adherence to the European Union Deforestation Regulation (EUDR), a law adopted to combat deforestation and forest degradation caused by EU consumption. It requires businesses to ensure that products they place on the EU market are not linked to deforestation or forest degradation, focusing on supply chain transparency and traceability.
Key Elements of EUDR Compliance:
- Scope:
Applies to commodities like soy, palm oil, beef, coffee, cocoa, rubber, and timber, as well as their derivatives like leather, chocolate, and paper.
Extends to both domestic production and imports into the EU.
- Due Diligence Requirements:
Companies must demonstrate products are deforestation-free and comply with local laws in the production country.
Requires geolocation data for agricultural plots where the commodities were produced.
- Risk Assessment and Mitigation:
Companies must identify and assess risks of deforestation in their supply chains.
Implement measures to mitigate identified risks, such as switching suppliers or requiring stricter sourcing policies.
- Traceability:
Businesses must trace products back to their origin (e.g., farms or plantations) and provide geospatial data.
- Penalties:
Non-compliance can result in fines, confiscation of goods, and bans on market entry.
Examples of EUDR Compliance:
- Coffee Importer: A coffee company sourcing beans from Brazil ensures compliance by:
Collecting geolocation data for the farms.
Verifying that coffee farms were not established on deforested land after December 31, 2020.
Monitoring supply chain practices to mitigate deforestation risks.
- Rubber Supplier: A tire manufacturer importing natural rubber from Indonesia:
Uses satellite imagery to confirm the plantation is deforestation-free.
Requires suppliers to adhere to sustainable farming certifications like FSC (Forest Stewardship Council).
- Chocolate Producer: A chocolate company sourcing cocoa from Côte d’Ivoire:
Partners with local cooperatives to obtain land-use data.
Implements a risk assessment program to ensure production aligns with EUDR.
- Furniture Manufacturer: A company importing timber from Malaysia ensures:
The wood is from legally harvested and certified sustainable forests.
The supply chain complies with EUDR due diligence and traceability protocols.
Benefits of EUDR Compliance:
Environmental Protection: Reduces deforestation and promotes sustainable land use.
Market Access: Ensures businesses can continue trading in the EU.
Reputation Management: Enhances brand image through sustainability.
Adhering to EUDR not only ensures legal compliance but also aligns with global environmental and ethical standards, benefiting both businesses and the planet.
