What is the European Deforestation?

The European Union Deforestation Regulation (EUDR) is a groundbreaking initiative aimed at ensuring sustainable sourcing of raw materials in the EU market. This law restricts products linked to deforestation or forest degradation from entering or being exported from the EU. The main goal is to curb greenhouse gas emissions and biodiversity loss caused by agricultural expansion tied to high-impact commodities. As a major consumer and economy, the EU is taking responsibility and leading the charge to address this issue. The EUDR not only aims to reduce deforestation's impact on products sold within the EU but is also anticipated to drive global demand for deforestation-free products.

The EUDR applies to vital raw commodities and their derived products, including palm oil, cocoa, soy, coffee, wood, rubber, and beef/leather. Compliance responsibility rests with the operators, initially consumer packaged goods companies, placing products in the EU market. Penalties for non-compliance range from market access restriction to fines up to 4% of annual EU market revenue, exclusion from public procurement, and more stringent due diligence requirements. Defining deforestation based on forest classification by the United Nations, the EUDR emphasises no exemption for legally determined deforestation, aiming for comprehensive coverage. Operators must establish due diligence processes involving supply chain mapping, risk assessment, and mitigation measures. The EUDR introduces risk-based controls, varying due diligence requirements based on a country's risk classification. With key dates set, including the December 2024 implementation, companies need advanced geospatial data capabilities like TraceMark to address the EUDR effectively and ensure supply chain transparency.