Background on European Union (EU) Deforestation Regulation (EUDR)
The EUDR guidelines are backed by an acceptance of the scale and impact of the trading volume the European Union has, due to some key commodity consumption leading to deforestation and degradation of forests in the EU and across the world. Approximately 1.2 million responses to public consultations were registered by EU citizens to tackle deforestation and forest degradation, with an idea of reducing the carbon emissions by almost 32 million metric tonnes a year.
According to a KPMG report, between 1990-2008, the EU imports amounted to 36% of deforestation linked to crop products and over 25% of deforestation linked to ruminant livestock products.
The EUDR, which came into force from June 29, 2023, specifically addresses the issues of deforestation and forest degradation associated with the expansion of agricultural land, driven by production of six key commodities (‘EUDR Commodities’) which include, cattle, cocoa, coffee, palm oil, rubber, soy, wood and derived products (‘EUDR products’) from it like leather, chocolate, tyres, or furniture etc.
As a part of the compliance, companies involved in trading of these commodities and derived products need to audit the source of the imports into the EU , post December 31, 2020, and ensure the goods are free from deforestation, forest degradation, and violations of local environmental and social laws.
According to the guidelines, the operators and traders in the EU are granted an 18-month transitional period, which ends on December 30, 2024 for large enterprises and on June 30, 2025, for micro and small enterprises.
After the transitional period, the EU commodities or products cannot be placed in the EU market or be exported unless they abide by the following guidelines:
- They come from deforestation- free zone
- They are produced in accordance with the local regulations of the country
- They are covered by a due-diligence statement
Evaluate whether the EU Deforestation Regulation affects your business
Traders and operators evaluating their status under the EU Deforestation Regulation should focus on key factors:
Examine production, procurement and supply chain in EU for coffee, cocoa, rubber, palm oil, soy, and cattle and their derived products, to ensure deforestation free trading and compliance with EUDR for imports and exports.
Company Scale and Model:
Assess company size and supply chain position, crucial in determining EUDR applicability for the specified commodities and their products. By working on these factors, businesses can adeptly navigate EUDR complexities, avoiding fines and market access risks.
Ensuring EUDR Compliance with SatSure Sparta
SatSure Sparta offers an end-to-end solution for EUDR compliance to traders and operators. We use a combination of satellite remote sensing and traceability solution with our credible partners to help tackle the following requirements:
- Deforestation Monitoring for coffee, cocoa, palm oil and Soy.
- Traceability Solution for Six Commodities and their derived products.
- Combined reporting for audit using deforestation analysis and traceability output.
Traders or operators must accurately identify the geographical coordinates of commodity production.
Along with our partners we designed supply chain vigilance to recognize all stakeholders associated with a commodity. Keeping data privacy and security at the core, we guarantee suppliers that their traceability data remains confidential and will never be disclosed to external parties.
- Provide your company and product information through a Due Diligence Statement.
- Traders & operators sourcing commodities and derived products must prove that the land was not deforested as of 31 December 2020.
We leverage open source optical satellite imagery to develop a forest cover baseline. The baseline with time-series analysis of the region will help demonstrate whether the area of sourcing the commodity had any deforestation after 31 December 2020.
Mitigate any identified risk of deforestation
We help major producers, traders and FMCG companies build stakeholder relationships. Our data enable you to stay vigilant and proactively monitor your supply chains for environmental risk in near-real-time so that you can comply and flourish in global commodity markets.
Penalties for non-compliance include fines of up to 4% of the company’s annual revenue, reputational damage, and potential exclusion from the EU market.
A Success Story of EUDR Compliance with SatSure Sparta
SatSure Sparta led a special case that needed a close look to see if our clients’s coffee estates comply with the European Union Deforestation Regulation (EUDR).
Methodology adopted by SatSure to facilitate our clients in conducting an audit for their coffee estates:
- Mapping Historical Land Use Information
Classification of plantations and forest areas was delivered with SatSure Sparta.
- Time Series Analysis for Compliance Audit
Satellite remote sensing indices like Normalised Difference Vegetation Index and Enhanced Vegetation Index were used to analyze the plantations, forest areas and analyze any possibilities of deforestation or degradation for the period of 3 years, 2020 to 2023.
- Ensuring Compliance
Our findings revealed that the areas did not undergo any deforestation or degradation between 2020 and 2023.
This case study exemplifies the power of advanced satellite technology in promoting transparency and accountability according to the EUDR guidelines.
Uncover the power of proactive EUDR compliance with SatSure Sparta.
Read our other case study on biomass estimation and procurement planning by clicking here.
To download our e-book on EUDR, click here.