Starting 30 December 2024, the EU Deforestation Regulation (EUDR) will be in full effect. This new rule requires companies selling products in the EU to ensure their goods do not contribute to deforestation. Here’s a simple guide on what the EUDR is, who it affects, and how businesses can prepare.
What is the EU Deforestation Regulation (EUDR)?
Why It Matters
Deforestation, mainly driven by the demand for products like coffee, cocoa, timber, and paper, is a major global problem. About 90% of deforestation is linked to how these products are sourced. Previous efforts to reduce deforestation have not been very successful, often due to lack of transparency in supply chains.
The EU, the second-largest importer of products causing tropical deforestation, decided to act. In 2023, they introduced the EUDR to ensure products sold in the EU do not contribute to deforestation, supporting the European Green Deal’s goals.
Key Points of the EUDR
The EUDR requires companies to verify their products are deforestation-free. This applies to:
– Cattle (beef and leather)
– Cocoa
– Coffee
– Palm oil
– Rubber
– Soy
– Wood (including furniture and paper)
Companies must trace these products back to where they were produced and ensure they follow local and international laws on land use, environmental protection, and human rights.
What Companies Need to Do
Deforestation-Free Checks
Companies must do thorough checks to confirm their products do not cause deforestation. This includes:
- Data Collection: Gathering detailed information about the product’s origin and supplier.
- Risk Assessment: Identifying any risks of non-compliance.
- Risk Mitigation: Taking steps to reduce any identified risks.
Compliance with Local Legislation
Companies must also ensure their products follow local laws on land use, environmental protection, labour rights, human rights, and the rights of indigenous peoples.
Due Diligence Statement
Businesses need to submit an electronic statement to the European Commission and relevant EU authorities, declaring they have checked their products and found minimal risk of non-compliance.
Important Dates
The EUDR will be implemented in stages:
- 2019: EU starts planning the EUDR.
- 2021: Proposal for the regulation is adopted.
- 2022: Agreement on the regulation.
- 2023: EUDR becomes law on June 29th.
- 2024: Medium and large companies must comply by December 30th.
- 2025: Small and micro-sized companies must comply by June 30th.
- 2028: The regulation will be reviewed every five years starting June 30th.
How Businesses Can Prepare
To comply with the EUDR and ensure a deforestation-free supply chain, businesses should:
1. Map Your Supply Chains
Gain comprehensive visibility into your supply chains by tracing products back to their origins. Identify any gaps in traceability and areas at high risk for deforestation.
2. Conduct Risk Assessments
Set up strong systems to collect, verify, and report the origins and production methods of your products. Regularly assess risks to spot any compliance issues.
3. Mitigate Risks
Work closely with suppliers to improve practices and ensure they meet EUDR requirements. Communicate with all partners to ensure they understand and comply with the new rules.
4. Continuously Monitor Progress
Stay updated on any changes or new guidelines related to the EUDR. Regularly review and update your due diligence processes to stay compliant.
Conclusion
The EU Deforestation Regulation is a significant move towards reducing global deforestation by increasing transparency in supply chains. By understanding and preparing for the EUDR, businesses can contribute to more sustainable practices and support efforts to protect our forests.