Intro

In today’s environmentally conscious world, consumers are increasingly demanding sustainable products. Businesses that can demonstrate a commitment to ethical sourcing and deforestation-free practices gain a significant competitive advantage. The upcoming European Union Deforestation Regulation (EUDR) will further solidify these trends, presenting both challenges and opportunities for companies operating in the EU market.

This blog is the first in a series to help you understand the EUDR. Over the next several weeks, we’ll delve into its intricacies, highlight the potential risks and benefits, and explain how GreenAnt’s innovative certification service can streamline compliance and empower your business to thrive in the evolving landscape.

What is the EU Deforestation Regulation?

The EU passed the EUDR in June, 2023, and the regulation will come into effect beginning in 2025. The EUDR aims to tackle deforestation and forest degradation associated with the production of certain commodities traded on the EU market. This regulation goes beyond the 2013 EU Timber Regulation (EUTR), which prohibits the import of products explicitly linked to illegal logging. Instead, the EUDR bans the import of key goods that are sourced from deforested land, regardless of whether the deforestation was legal or illegal in the host nation.

The EUDR impacts any product derived from 7 commodities:                          

• Palm Oil
• Coffee
• Cocoa
• Soy
• Cattle
• Rubber
• Wood

The regulation is set to have a sweeping impact: imported products that will fall under the regulation include anything from printed books to wooden furniture, to leather, glycerol, and stearic acid. Even if your product is linked to cattle raised on deforestation-free farmland, but the cattle’s feed is sourced from deforested fields, your product is not EUDR compliant, and you will not be able to export to the EU. (For more details, go to the European Commission’s page on Regulation on Deforestation-free Products.)      

Why Should You Care About the EUDR?

Here’s the rub: every producer and trade operator will be responsible for proving their compliance with the regulation. Upon every export, they must submit what’s called a Due Diligence Statement, an official document guaranteeing that the exported product’s supply chain is statutorily deforestation-free—in other words, that it has undergone less than 10% deforestation since June 2020. The Due Diligence Statement must be based on European satellite data. If you cannot produce a Due Diligence Statement, you cannot export your goods to the EU. If you do manage to export your goods but are later found to have violated the regulation—if you falsified your Due Diligence Statement, for example—your company will face heavy fines and potential trading bans.

Importantly, producers and trade operators will be obligated to conduct year-round due diligence to ensure that their products remain deforestation-free and compliant.

To recap—here’s why you should pay attention to the EUDR: 

• Market Access: Companies that can’t demonstrate deforestation-free sourcing risk losing access to the lucrative EU market, whose population exceeds 450 million. Failure to comply with the EUDR could also result in fines, product bans, and reputational damage.
• Consumer Demand: Consumers are increasingly prioritizing sustainability, and the EUDR reflects this growing trend. Meeting EUDR requirements allows you to demonstrate your commitment to ethical sourcing and attract environmentally conscious customers. By achieving EU deforestation-free certification, you can gain a significant marketing advantage.
• Supply Chain Transparency: The EUDR compels businesses to improve their understanding of their supply chains. This increased transparency fosters better risk management and strengthens relationships with suppliers who share your sustainability values. Understanding your supply chain from “farm to fork” is crucial for EUDR compliance.

The Challenges of EUDR Compliance

While the EUDR promotes responsible sourcing, navigating its complexities can be challenging. Here are some potential hurdles associated with EU Forest Risk Assessment:

• Data Collection: Gathering comprehensive data on your supply chain – particularly for geographically dispersed operations – can be a significant undertaking. Traceability is key for EUDR compliance.
• Monitoring and Verification: Continuously monitoring your supply chain to ensure deforestation-free practices requires robust systems and ongoing due diligence efforts. EUDR compliance necessitates a proactive approach to monitoring deforestation risk.
• Documentation and Reporting: The EUDR will require documented proof of compliance in the form of a Due Diligence Statement. You’ll need a new, updated Due Diligence Statement every single time you export your goods to the EU. For companies – especially smaller-scale operations – this can create a significant  administrative burden.

How GreenAnt Can Help You Stay Ahead of the Curve

GreenAnt’s EUDR Certification Service is designed to empower businesses to navigate the EUDR with confidence. Here’s how we can help you achieve EU deforestation-free compliance:

Delegate Your Due Diligence Work: Get your Due Diligence Statements through Desidera in just a few clicks! We’ll take care of the rest. Navigate to the Desidera platform, click “EUDR certification” under the services tab, follow the prompts and trace the land along your product’s supply chain.

Let GreenAnt Help Mitigate Your Compliance Risk: Conduct your year-round due diligence through Desidera. Use the platform to track your supply and ensure that you are indeed deforestation-free. Planning to expand your operations or source from a new provider? Protect yourself against compliance issues before they occur! Use Desidera to verify that their land is deforestation-free before signing that contract.