Introduced last June 2023, the EU’s new Deforestation Regulation mandates companies involved in the trade of cattle, cocoa, coffee, palm oil, rubber, soya, and wood, along with products derived from these commodities, to undertake extensive diligence across the value chain. This is to ensure that the goods do not originate from recent (post 31 December 2020) deforestation, forest degradation, or violations of local environmental and social laws.
Companies must be vigilant because the scope of EUDR concerns not only imports into the EU but also intra-European productions. If your products are subject to the law, you will need to be ready to provide reports by 30 December 2024!
Save time and get to the essence of the regulation with practical information: download our EUDR Toolkit now!
What’s at risk for your company?
In due course, the intention is for breaches of the EUDR to lead to criminal penalties, but under the EUDR itself, penalties may include:
- Fines proportionate to the environmental damage and value of the items (it will gradually increase with repeated infringements) with a maximum of at least 4% of EU turnover in the preceding year and may be increased to exceed the potential economic benefit;
- Confiscation of the covered products or confiscation of the revenues gained from the items;
- Temporary exclusion from public procurement processes and public funding; and
- For serious or repeated infringements, temporary prohibition from dealing in the EU in those items, or a prohibition from using the simplified due diligence process.
Traceability from batches or shipments to plots is the cornerstone of EUDR
To be compliant, it is necessary to be able to combine data on the plot, origin, and contents of each shipment and container. Establishing this link involves being able to verify and trace, for each shipment and each container, all the plots that compose it. If any product within a container is suspected of being non-compliant, the entire container may be held in customs or confiscated.
With our traceability platform, you can link and navigate seamlessly from purchase orders to shipments, batches of raw materials, and all the way up to lists of plots of origin. This capability enables you to detect inconsistencies (non-compliant shipments, plot sizes inconsistencies, abnormal parcel productivity levels, etc.) and conduct comprehensive risk analysis of your entire supply chain based on product family, commodities, origin, supplier, and plots.
Tilkal's EUDR Toolkit: save time and get to the essence of the regulation with practical information.
To take the deforestation analysis of plots to the next level, we can also integrate third-party data that provides a geographical dimension (satellite data, temporal comparison of plot evolution, physical audits, etc.). When used independently, these geographical data offer a first-level response regarding the condition of the plots associated with your products. Through their aggregation with our solution, we can cross-reference this geographical data with robust and auditable traceability data that reflects the actual functioning of your supply chain. This process allows us to verify the consistency of this data and enhance visibility into the origin of products.
It's not too late for you to prepare and implement the necessary components for your compliance, contact our experts to discuss your compliance issues!