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Navigating Implementation Challenges from the European Union Deforestation Regulation (EUDR)

In response to the pressing need for environmental action, the European Union has taken a significant step forward with the approval of the European Union Deforestation Regulation (EUDR).

  • Scheduled for implementation from December 2024 onwards, this regulation targets key products linked to deforestation, such as cattle, cocoa, coffee, palm oil, rubber, soy, and wood, aiming to curb the alarming rates of deforestation worldwide.

The EUDR is a commendable effort towards sustainability, yet it presents implementations challenges for diverse stakeholders, notably small-scale farmers, their associations and importers. Collaboration across the supply chain is key to overcoming these challenges, as explored in topics below.

1. Communication and Consultation
Lack of communication and consultation with producing countries has led to concerns, with several governments expressing their reservations. The main point of concern is the timeline for starting implementation of the regulation (December 2024), which is deemed unrealistic particularly for countries with smaller-scale agricultural operations.    

2. Impact on Small-Scale Farmers
Small-scale producers, particularly those with limited resources, face potential exclusion from the supply chain due to the complexities and costs associated with compliance with the regulation. While direct compliance might not be mandatory for them, coordinating the provision of information, such as geolocation, with other actors in the supply chain in producing countries becomes a prerequisite if they aim to export their products to the EU. The regulatory burden may disproportionately affect and hinder their participation in international markets. 


3. Data Entry and Infrastructure Issues
Importing companies must provide geolocation data indicating the origin of the products to ensure they have not been produced in areas affected by deforestation. This poses a challenge, especially with large shipments involving a mix of products from various sources. The current manual process for entering this data is resource-intensive and inefficient, which presents a considerable challenge for importing companies. Additionally, insufficient infrastructure and functional IT systems in both administrations and companies may hinder the effective implementation of the EUDR. 


Industry Discussions

a) Extended Timeframe
Stakeholders suggest extending the implementation timeframe to provide more room for preparation, especially for countries and industries facing infrastructure challenges. During this period leading up to the official implementation date (December 2024), companies in the EU should review their due diligence systems to identify gaps and implement necessary adjustments to ensure compliance with the EUDR.

b) Support Mechanisms

Acknowledging the need for support, especially for small farmers, GFFA participants called for the establishment of support mechanisms such as funds and initiatives to facilitate compliance. A critical step would entail training suppliers in producing countries with the information they need to understand the EUDR, its scope, impact, and how to align with its requirements.

c) Dialogue and Cooperation
Emphasis on fostering open dialogue and cooperation between the EU and producing countries to ensure that the regulations are well-aligned with local conditions and challenges.

d) EUDR Alignment
The EUDR’s due diligence framework aligns with international standards, which also constitute the foundation for other European regulations aimed at enhancing companies’ due diligence activities in ESG matters. Understanding the EUDR’s scope and identifying gaps in the company’s due diligence systems are crucial for compliance, highlighting the need to create a comprehensive roadmap for implementing necessary changes or developing new systems.

e) Leveraging Local Solutions
Leveraging local policies and solutions to ensure that the implementation of regulations aligns with the unique conditions of each producing region.

    How Can RCS Global Help?

    RCS Global is a one-stop solution provider for all needs emerging from regulatory requirements in responsible sourcing, assisting our clients in the implementation of regulations such as the EUDR by: 

    responsible sourcing, gap analysis, advisory, due diligence, ESG risk management, supply chains, assessment

    Ana Sandres
    Senior Project Manager