The world’s first ever regulation on deforestation-free products (EUDR) prohibiting imports and exports of products linked to deforestation entered into force in June 2023.
What the new EU regulation on Deforestation-Free Products says
In June 29, 2023, the EU Timber Regulation was replaced by the Regulation on deforestation-free products. Operators and traders will have to comply with the new rules by December 2024, while smaller businesses will enjoy a longer adaptation period and specific provisions.
Key objectives of the new EU Regulation on deforestation-free products:
· Prevent EU consumption from contributing to deforestation and forest degradation (Forest degradation involves a decrease in the biological quality of the forest - such as fewer trees, or decrease in tree, plants or animal diversity)
· Reduce carbon emissions caused by relevant commodities by at least 32 million metric tons annually
· Address deforestation driven by agricultural expansion for these commodities both within the EU and globally
To ensure compliance, the regulation imposes extensive due diligence obligations on operators and traders to prove their products are not sourced from deforested of degraded land. Obligations include responsibilities on data collection, risk assessment and, when relevant, risk mitigation.
The new directive means traders and operators' will need more accurate data about their supply chains to comply with the regulation and ensure access and competitiveness in the EU markets.
Which organizations and products are subject to the EU Deforestation-Free Products law?
The regulation impacts many product categories, basically anything containing or made from soy, wood, rubber, charcoal, cattle, cocoa, coffee or palm oil.
Under the regulation, anyone selling commodities on the EU market or exporting them must prove that products are not from deforested land or contributed to forest degradation after the established cut-off date: December 31, 2020.
Large companies must comply with the Regulation from June 29, 2023, with obligations starting on December 30, 2024.
For SMEs, the obligation begins on June 30, 2025.
How to prove your supply chain is not causing deforestation or forest degradation?
Satellite based analysis of land use changes over time
Satellite images can help remotely assess the land use changes at the place of origin of products in your supply chain, to help you prove your supply chain is not related to deforestation or forest degradation.
How does this work? Essentially, by going back in time.
Current and historical satellite imagery – at Everimpact, we work with data from as early as 2000 – can be analyzed to precisely track what has happened to a big or small plot of land with up to 1 m x 1 m resolution. Forest and satellite experts can monitor tree species, biomass and carbon sequestration in forests as well as soil condition and carbon in fields over time.
This means it's easy to spot any land use changes in the areas of origin of your products, after the December 31, 2020 cut off date. You can tell if and when an area has been deforested, or degraded. This analysis can be done in a few weeks, and made available through online dashboards, APIs or reports which can be used to comply with the new regulation.
How will the EU regulation on Deforestation-Free Products regulation be enforced?
The regulation will be enforced by the competent authorities of the EU Member States, they are yet to be nominated. They will carry out checks on operators and traders to ensure compliance with the regulation.
Non-compliance will lead to sanctions, including fines, confiscation of products, and exclusion from public markets and funding.
The penalties and fines will be proportionate to the nature, gravity, and duration of the infringement, and will take into account the economic benefits derived from the infringement . The regulation also provides for a system of mutual administrative assistance between the Member States to ensure effective enforcement of the regulation.
Get in touch if you need help proving your supply chain is deforestation free.
Watch our Forestry webinar to find out how we can monitor land use changes (degradation and deforestation) in your supply chain