Context of EUDR implementation

The European Union Regulation on Deforestation (EUDR) is an important initiative aimed at reducing deforestation and promoting sustainable business practices within the EU. Its introduction was a reaction to alarming rates of global forest loss. The EUDR requires companies to ensure that certain products sold in the EU are not linked to deforestation or forest degradation. The regulation covers products such as soya, palm oil, coffee, cocoa and timber, requiring businesses to actively protect forests and support sustainable sourcing practices.
EUDR is part of the EU's wider environment strategy, which includes commitments on climate action, biodiversity and sustainable land use. By making companies responsible for their supply chains, the EUDR aims to create a more sustainable market and reduce the EU's contribution to global deforestation.

Key EUDR requirements

The EUDR outlines several critical requirements for companies, especially those with a significant market presence. Here are some of the main obligations:

Due diligence obligations: Companies must conduct extensive due diligence to assess the deforestation risks associated with their supply chains. This includes assessing the origins of products and ensuring that they are sourced in a sustainable manner.

Traceability: Businesses must implement systems that allow products to be traced back to their source. This involves keeping detailed records that can be audited to demonstrate compliance with EUDR standards.

Geolocalisation data: Companies must provide geolocation data for the areas from which their products are sourced. This requirement is essential to verify that products are not associated with deforestation.

Compliance reporting: Companies are required to prepare and submit reports that evidence compliance with the EUDR. This includes documenting supply chain information, risk assessments and actions taken to mitigate deforestation risks.
Involving small farmers: EUDR encourages businesses to work with small farmers and local communities to promote sustainable farming practices and ensure compliance throughout the supply chain.

Impact on suppliers to large companies

The EUDR has significant implications for suppliers to large companies. Here are some of the key impacts:

Increased surveillance: Suppliers will face increased scrutiny of their sourcing practices. They must be prepared to demonstrate compliance with EUDR requirements, which may require additional investment in traceability and sustainability initiatives.
Cost implicationImplementation of EUDR compliance measures may entail additional costs for suppliers and small and medium-sized enterprises (SMEs). These costs could come from updating systems, carrying out risk assessments and maintaining accurate records.
Access to markets: EUDR compliance may become a prerequisite for accessing the EU market. Suppliers who cannot fulfil these requirements could find themselves at a competitive disadvantage or excluded from major contracts.

Good practices in EUDR implementation

To effectively navigate the EUDR and ensure compliance, companies can adopt several best practices:

Development of robust traceability systems: Investing in technologies that improve traceability can help suppliers track products from farm to market. This may involve using blockchain technology or other digital solutions to maintain transparent records.

Conduct regular risk assessments: Implementing routine supply chain risk assessments can help identify potential problems before they escalate. This proactive approach allows companies to address deforestation concerns early.

Stakeholder involvement: Working with small farmers, NGOs and local communities can promote sustainable practices and strengthen compliance efforts. Building partnerships can increase trust and facilitate knowledge sharing.

Investment in training and capacity building: Training suppliers and smallholder farmers on sustainable farming practices and EUDR compliance can help improve the sustainability of the entire supply chain.

Keeping up to date with regulatory changesStaying up to date with updates and changes to EUDR regulations is crucial to maintaining compliance. Companies should regularly review their practices to ensure they are aligned with evolving requirements.

The EUDR represents a significant change in the way companies approach sustainability and supply chain management. By understanding key requirements and adopting best practice, suppliers can ensure compliance and make a positive contribution to environmental conservation and sustainable trade. As the regulatory landscape evolves, proactively engaging with these requirements will be essential to remain competitive in the EU market.