October 11, 2023
Background of the EU Deforestation Regulation
Forests provide a broad variety of essential environmental, economic, and social services as they harbor most of the Earth’s terrestrial biodiversity. Yet every year 10 million hectares of forest are deforested. The FAO estimates that 420 million hectares of forest have been lost worldwide between 1990 and 2020, with EU consumption causing around 10 % of these losses.
The EU Deforestation Regulation (EUDR) aims to reduce the EU's consumption-driven deforestation by ensuring that products entering its market do not contribute to deforestation or forest degradation. The EUDR is a significant step towards protecting forests, reducing the impact of the EU market on global deforestation, and fostering responsible supply chains.
Overview of the EU Deforestation Regulation
The EU Deforestation Regulation (2023/1115) mandates companies importing certain commodities into the EU to provide evidence that their supply chains are free of deforestation. The regulation affects seven commodities responsible for the largest share of EU-driven deforestation: cocoa, coffee, palm oil, soy, rubber, cattle, and timber, as well as derived products such as beef, furniture, and chocolate.
The EU Deforestation Regulation sets forth specific provisions to mitigate the risk of deforestation and forest degradation in the supply chains of certain products. The key provisions of the regulation include:
Which companies will be affected?
The rules will be applicable to companies involved in the commercial activity of placing these products on the EU market or making them available for export. The main obligations target non-SME companies, while SME companies are permitted certain exemptions from the rules.
Non-SME companies will have 18 months to implement changes to comply with the main obligations of the regulation, while SME companies have a longer period of 24 months to comply with the new rules.
EUDR Compliance Timeline
The EU Deforestation Regulation entered into force on 29 June 2023. Non-SME companies will have 18 months to implement changes to comply with the main obligations of the Regulation, while SME companies have a longer period of 24 months to comply with the new rules.
Due diligence requirements
Companies must follow a thorough due diligence process before selling relevant products on the EU market:
Penalties for infringements
Violations of the EUDR will result in severe penalties. EU Member States must lay down specific rules on penalties, which according to the EUDR shall include:
The role of satellite imagery
Satellite data plays a key role in ensuring traceability and compliance as it provides the technical and scientific means adequate to determine whether the relevant products are deforestation-free. In order to better monitor changes in the world’s forest cover, earth observation monitoring tools are crucial that provide easy-to-understand data and information linking deforestation, and forest degradation, to the respective commodities and products.
Contact us to discover how nadar's traceability and compliance software can support your business in achieving EUDR compliance.
Caroline is an experienced data scientist with a management degree from TU Munich and a degree in earth observation from the University of Würzburg, which is co-chaired by the German Aerospace Center (DLR). She has worked as a data scientist in the areas of nature conservation and land use change monitoring at WWF, the German Centre for Integrative Biodiversity Research (iDiv), and at tech companies such as Celonis and Deloitte.