EUDR Compliance: 4 Essential Questions every Sustainability Manager needs answered

EUDR became effective on June 29th, 2023 in the European Union, to address deforestation and forest degradation linked to the import and production of specific commodities within the EU. As of 30 December 2024, most organizations are required to ensure compliance with their obligations under the EUDR, leaving a short adaptation and preparation period.?

This article aims to provide a comprehensive overview of EUDR, covering aspects on which commodities are included, who must comply, and what specific requirements are obliged to meet, to increase awareness and facilitate adherence to the regulations.

Q1: Which commodities fall under the scope of EUDR and how is this relevant to my organization?

EUDR targets seven commodities that are commonly associated with deforestation and degradation including beef, soy, palm oil, cocoa, coffee, rubber, timber, and wood products. It also covers several products derived from high-risk forests, such as chocolate, palm oil, soybean oil, and furniture - commonly found in various consumer goods industries.

Check Annex I for more clarifications regarding the derived products or materials within the scope.

EUDR mandates that both operators and traders who supply these commodities or products in the EU demonstrate compliance. This means providing evidence that their products were produced without deforestation or degradation, following all legal requirements, and accompanied by a due diligence statement.

• An operator is any entity within the EU that introduces relevant products onto the market or exports them from the EU.?
• A trader is any entity that buys and sells relevant products already on the EU market for distribution, further processing, or consumption.

Q2: What needs to be disclosed in the due diligence statement?

A Due Diligence Statement consists of three components:

1. Information gathering under traceability. This includes product details, quantity, suppliers, country of production, and proof of legal harvest. It is crucial to obtain geolocation coordinates for the production plots and include this information in the statement. EUDR specifically mandates that operators and non-SME traders should trace the origin of every relevant commodity back to its specific plot of land to ensure accountability in the supply chain and prevent any violations of the regulation.
2. Risk assessment and documentation. Organizations must use the data collected in the first step as part of their risk assessment to evaluate the likelihood of non-compliance based on criteria outlined in EUDR. This assessment must be documented and reviewed at least once a year, with records accessible to responsible authorities upon request.
3. Risk mitigation operations. If risks of non-compliance exceed negligible levels, organizations must take steps to mitigate them. Organizations that source from low-risk areas have simplified due diligence requirements and are exempt from risk assessment and mitigation unless they receive relevant information indicating potential risks of non-compliance.

Q3: What are the reporting obligations for organizations under EUDR and other related EU regulations, such as CSRD?

Organizations that are already obligated to conduct value chain due diligence under other EU laws like CSRD may meet their reporting obligations for EUDR by including the necessary information in their reports for those other legislations. This means they do not need to conduct additional due diligence specifically for EUDR reporting if they are already complying with other relevant EU legislation.

Q4: What’s the key to maintaining my compliance with EUDR?

Ensuring compliance with the EUDR requires organizations to have a strong traceability and monitoring system in place. This specifically outlines several functional requirements for the monitoring system. Firstly, it should provide real-time and customized risk data at national and regional levels sourced from the origins. Additionally, those data are consolidated from reputable databases to ensure information reliability and offer valuable insights for action. Furthermore, the system should enable easy sharing and collaboration with upstream and downstream stakeholders to facilitate compliance with requests.

Agriplace collaborates with various certification schemes and consulting agencies to offer a holistic sustainability risk assessment and Supply Chain Management solution that not only meets EUDR standards but also addresses broader European regulations like CSRD. This approach ensures that our offerings provide comprehensive compliance and streamlined due diligence across all aspects of European legislative requirements.?

References:

Sydney K.“Navigating the EU Regulation on Deforestation-Free Products: 5 Key EUDR Questions Answered About Company Readiness and Investor Risk” . April 2, 2024. https://www.sustainalytics.com/esg-research/resource/investors-esg-blog/navigating-the-eu-regulation-on-deforestation-free-products--5-key-eudr-questions-answered-about-company-readiness-and-investor-risk

Preferred by Nature. “ABOUT THE EUDR” Accessed: May 16, 2024. https://preferredbynature.org/certification/eudr/about-eudr#:~:text=for%20more%20information.-,When%20do%20I%20need%20to%20be%20ready%3F,-Most%20organisations%20must

Southern Forest Product Association. “What do you need to know about the EUDR timeline”. Accessed: May 16, 2024.?

https://www.southernpine.com/wp-content/uploads/2023/09/What-You-Need-to-Know-About-the-EUDR.pdf

“Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010.” June 9, 2023. https://eur-lex.europa.eu/legal-content/EN/TXT/?

Theresa L. “5 common misunderstandings about the EU’s deforestation policy, clarified”. February 8, 2024.

https://www.greenbiz.com/article/5-common-misunderstandings-about-eus-deforestation-policy-clarified

“FAQs-Deforestation Regulation” December 22, 2023. https://circabc.europa.eu/ui/group/34861680-e799-4d7c-bbad-da83c45da458/library/e126f816-844b-41a9-89ef-cb2a33b6aa56/details