The next level of Supply Chain Transparency with the European Union Deforestation Regulation (EUDR)

Achieve compliance seamlessly with CommonShare’s Order Level and Product Level traceability, providing you with unbeatable granularity to meet the highest degree of complexity in your supply chain.

A Closer Look at the EUDR Requirements

Discover why EUDR is more complex than any other supply chain management and traceability regulation, and how CommonShare is built to support your compliance needs.

What is EUDR?

The European Union Deforestation Regulation (EUDR) aims to combat deforestation and forest degradation linked to the production and consumption of certain commodities. The EUDR represents a significant step in the EU’s efforts to address global deforestation and promote sustainable supply chains. This regulation applies to commodities such as soy, palm oil, beef, wood, cocoa, coffee, and their derivatives. These products are linked to deforestation and forest degradation, either directly or indirectly. Companies placing these commodities on the EU market must conduct due diligence to ensure they are not sourced from land that has been deforested after December 31, 2020. This includes obtaining geolocation data to trace the origin of the products. Not only must the products comply with EU requirements, but there is also a provision in the EUDR that the products must comply with the relevant legislation of the country of origin, including environmental laws, land-use rights, and labor laws. Companies will need to submit Due Diligence Statements (DDSs) to a centralized EU database to ensure transparency and enable monitoring of compliance with the regulation.

EUDR specifically targets commodities with significant impact on deforestation and forest degradation. These include the following:

• Soy: Includes soybeans and products derived from soy.
• Palm oil: Includes crude palm oil and palm kernel oil, as well as products derived from these oils.
• Beef: Includes fresh and processed beef products.
• Wood: Covers all types of wood and wood products, including furniture.
• Cocoa: Includes cocoa beans and products derived from cocoa, such as chocolate.
• Rubber: Includes natural rubber and products made from natural rubber.

Status

EUDR came into force in June 2023. The main obligations will apply from December 30, 2024, allowing companies an 18-month period to adjust their operations and ensure compliance. Small and micro enterprises are given a longer adaptation period.

Who does it apply to?

The regulation thus encompasses a wide range of actors involved in the supply chain of the covered commodities, ensuring that all stages from production to market placement adhere to the EUDR's deforestation-free requirements. Specifically, it targets:

• Operators: Companies that first place the regulated commodities and products on the EU market. These operators are responsible for ensuring that the products meet the due diligence requirements, including verifying that the products do not come from deforested land post-December 31, 2020.
• Traders: Entities involved in trading the regulated commodities within the EU market. Traders must ensure that they only handle products that comply with the EUDR's requirements, and they must pass on due diligence information down the supply chain.
• Exporters: Companies that export the regulated commodities and products from the EU. These exporters are required to ensure compliance with the EUDR, similar to operators and traders.
• Non-EU Companies: Companies that export the regulated commodities and products from the EU. These exporters are required to ensure compliance with the EUDR, similar to operators and traders.

How to Address It?

These requirements are far more stringent and far reaching than any previous regulations. To address them, several steps must be taken to ensure compliance:

1. Conduct Comprehensive Due Diligence – This should include Geolocation Data, a Supply Chain Traceability system, and a Risk Assessment of your supply chain.
2. Ensure Legal Compliance – Verify that commodities comply with all local regulations related to environmental protection, human rights, and the rights of indigenous people.
3. Submit Due Diligence Statements – Prepare these statements and have them verified by third parties to ensure accuracy before submitting them to the centralized EU database.
4. Implement Monitoring & Verification Systems – You’ll need to verify the origin of the commodities and monitor compliance continuously by conducting internal audits and third-party verifications to ensure adherence to the EUDR.

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