You have heard about EUDR several times now, but for every producer, processor and trader who expects to import to or export from the European Union as of the beginning of 2025, you will hear about it even more often from now on. If you are involved in any such trade, you are doubtless already aware of this.
The regulation is to ensure that there has been no deforestation associated with a range of products for sale in, or exported from Europe. This includes beef, offal, hides, skins and leather. The other commodities covered are Timber, Palm Oil, Soy, Rubber, Cocoa and Coffee and anything derived from them, so for example chocolate and foods containing it, instant coffee, tyres and any clothing containing rubber, oil cake and meals, husks (full list in the legislation).
Since this also includes such things as used tyres, any export of those from Europe for recycling will become next to impossible.
Since there has to be a full segregated supply chain traceability associated with these products, every single farm that has cattle whose meat, offal or hides will pass into or out of Europe is included under this legislation, as are all of the processors and other companies through whose hands these products pass.
Clearly, although milk products are not included in the legislation, dairy farms are because their offspring and cull cows are part of the meat and leather value chains.
Although countries will be categorised according to risk of deforestation, that does not change the due diligence requirements, but only the frequency with which checks will take place. Thus EU states themselves must also comply with this, as well as countries such as Uruguay where forest cover has increased by 153% since the 1990s (largely through planting of exotic species such as Eucalyptus).
As it happens, EU countries already have traceability back to farm of origin associated with cattle passports, and Uruguay has a similarly comprehensive system. For those countries the main challenge may be offal and hides, which are covered by the regulation.
The complexity of complying with this should not be underestimated. Typically hides and offal are not identified or traceable after slaughter, and both hides or meat / offal from large numbers of cattle from different sources are shipped together, with ground meat potentially containing meat from more than one country. Although mixed lots are allowed, they have to be segregated to contain only products from compliant farms, each of which has to be traceable through all life stages back to the farm of origin.
The costs of non-compliance are significant, with the potential for fines of up to 4% of EU turnover for any company found to be non-compliant, being applied to the company either placing such products on the EU market or exporting them from the EU. Such non-compliance would include having insufficient evidence of due diligence and traceability for the products concerned, whether or not it could be proven that there was deforestation associated with them.
The basis for deforestation in this case is a 2020 map created by the EU and a constantly updated version of the same. Any farm whose coordinates correspond with any deforestation (legal or illegal) since 2020 is automatically excluded from selling into or out of the EU. For the other commodities, the entire perimeter of plots growing the crops have to be given. For beef and hides, it is a coordinate representing the “establishment” (farm, ranch, feedlot etc. ) at which the cattle were kept.
That clearly raises questions of its own, since a single coordinate cannot realistically tell one anything about deforestation; one would need a cross reference to a list of known establishments with deforestation on them to infer whether an establishment was deforestation-free, and that does not exist for Europe or, indeed, for many other countries. There is also a question about whether the maps are capable of distinguishing between deforestation of native forests and felling of plantation forest for timber.
The EU has also said that they may add to this any form of land conversion in the future, e.g. any wooded land or even grasslands converted to crops etc.
If you are potentially affected I do recommend that you download and read the entire regulation here and visit this site and the FAQ at the bottom of the page for further explanatory information.
I know that many of those affected by this are not yet, and may still not be, fully prepared for it when the regulations are applied as of 1st January 2025. We want GRSB to play as much of a role as we can in helping members to prepare, and therefore would start with a series of calls, leading up to in-person workshops.
Part of this will involve engaging in a process with ISEAL which will cover all the commodities and share experience between platforms, such as the other commodity roundtables. Please contact myself and Josefina to share any relevant information, questions etc and register interest in getting involved in this.
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