EUDR in Action
How the EU Deforestation Regulation is driving positive action by governments, companies, and farmers
Introduction
The EU Regulation on Deforestation-free Products (EUDR) is a landmark in global efforts to fight rampant deforestation. According to the World Resources Institute, as recently as 2023, ten football fields of tropical forests were being lost every minute - much of which was exported to the EU.
The EUDR is one of the most comprehensive efforts yet to tackle this scourge which harms communities and drives the biodiversity and climate crises, and it is already spurring improvements in producer countries: companies and small-scale farmers are already making changes to ensure they are compliant, partly because they see the EU law as an opportunity to improve their livelihoods.
But industries and some governments are pushing back. Calling for it to be delayed or watered down.
On 5 September, Fern and Mighty Earth hosted a webinar, facilitated by Philippa Nuttall of the Financial Times’ “Sustainable Views”, to help increase awareness of how governments, companies and producers are preparing, and the opportunities for “win-win” outcomes for business and nature.
Presentations included:
Glenn Hurowitz from Mighty Earth talked about some of the stakeholders already preparing to comply with the EUDR, comparing their action with the words of industry groups, such as the Canadian timber lobbyists pushing for implementation to be delayed.
Nicole Polsterer from Fern urged the European Commission to outline how it will support smallholders to comply with the EUDR and called on the EU to devise partnerships with producer countries to tackle the root causes of deforestation.
Dr Raoni Rajão, Director of the Department of Policies for the Control of Deforestation and Burning, Brazilian Environment Ministry, spoke about Brazil’s target to reach zero legal and illegal deforestation by 2030, including by reducing and compensating legal deforestation via economic incentives. In order to comply with such a goal, Brazil is implementing better monitoring and transparency systems. Dr Rajão indicated that Brazilian States have the primary obligation to check compliance and that some are devising systems to track farm activities.
Dr Rajão also presented a new voluntary programme, Brazil+ Sustentavel, which will allow farmers to show responsible buyers that their goods do not stem from deforestation. Finally, Dr Rajão stressed the importance of European operators checking compliance with national laws when applying the EUDR.
Juliette Cody, Global Lead for Climate & Nature at Barry Callebaut (BC), introduced her company as the world’s leading chocolate manufacturer, and detailed their approach to the EUDR - focusing on minimising the risks of non-compliance in the supply chain.
Ms Cody acknowledged the challenges, especially regarding the scale at which traceability is required and how prescriptive it is about the nature of products that can be imported, but she also stressed the opportunities and stated that BC will be fully ready to comply on 1 January, 2025. BC has invested in EUDR compliance, and in ensuring smallholders are still included in the supply chain. She underlined that BC would welcome additional Commission guidance, especially on legality criteria.
She ended by highlighting the spirit of collaboration the law have generated around efforts to reach compliance. She hopes it will continue in the first months of implementation.
Michael Amoah, Deputy Director of Research and Development at the Ghana Cocoa Board, presented Ghana’s national approach to compliance.
Mr Amoah started by indicating the challenges posed by the EUDR, especially for smallholder farmers, who dominate cocoa production – one of Ghana’s key exports. He explained that 70% of farms were not covered by a private sector traceability system, and that 60% of Ghana cocoa is exported to the EU.
It is therefore critical for Ghana to take action.
Ghana’s national cocoa traceability system was set up to ensure smallholders weren’t excluded from the market due to a lack of compliance systems, and it has already contributed to the mapping of over 1.2 million farms and 800,000 farmers. It also aims to reduce compliance costs and improve competitiveness, making Ghana an attractive source of EUDR compliant cocoa.
The system, which is now up and running, allows all cocoa to be traced to the plot from where it originated. Ghana has also developed a deforestation assessment model, and tools and instruments to assess the risk of child labour and to prevent it, in order to enable farmers to demonstrate compliance with relevant national laws.
Mansuetus Darto, from Indonesia's Palm Oil Smallholder Union (SPKS), explained that most small-scale farmers producing oil palm do not know where their products end up as they lack direct contact with companies. Their harvests are generally bought by collectors who act as middle-men between farmers and processors.
Another important challenge is that many farmers do not have documents to prove that their farms are legal. They need help to map their farms, such as geolocation coordinates to show that their farms are not located in protected forest areas. So far, companies and the government have done little mapping of smallholder farms. Mr Darto also underlined that smallholders do not have a manufacturing facility to do processing themselves.
Mr Darto called for urgent technical and financial support of €70-200 per farmer to ensure that smallholders are not excluded from EU supply chains. He also encouraged EU operators to buy directly from farmers and support them to build small-scale manufacturing facilities. The cost of building a factory with a capacity of five tonnes per hour would be around €300,000.
Katja Albrecht, Advisor at the German Agency for International Cooperation (GIZ), detailed how the project she oversees (Sustainable Agriculture for Forest Ecosystems – known as SAFE), helps preparing value chain actors for EUDR requirements in ten producer countries.
She presented some of the goals of the projects, including aligning supply chains with the EUDR; building smallholder capacity (such as by supporting the collection of geolocation data: and improving access to finance to facilitate the transition to deforestation-free production.
Ms Albrecht focused on the work they are doing in Ecuador, where SAFE helps strengthen the government system for registering farmers. In Indonesia they are working with the state-owned enterprise PT Surveyor Indonesia to include smallholder data being collected as part of the National Dashboard for Commodities - Indonesia’s mandatory tool for operators to comply with the EUDR.
During discussions the following issues were raised:
Mr Darto spoke about a fund his organisation has set up to train Indonesian smallholders on how to map their land, and insisted on the need for companies to provide a fair price to farmers.
Ms Cody detailed the need for additional Commission guidance on the EUDR’s social and human rights aspects. She underlined that BC will continue working with the same suppliers although it required work to articulate what compliance should look like and suppliers’ role.
When considering how to plan for the EUDR’s entry into force, the following issues were raised:
Dr Rajão stressed that EU signalling to third countries is important as if the EU doesn’t provide the necessary guidance in time it will lead to demobilisation and scepticism from some actors in Brazil and will also determine the actions of farmers.
Mr Darto said that small-scale farmers are optimistic and are ready, concerns don’t come from them but from palm oil companies and EU operators. He underlined that SPKS member farmers can only provide the palm oil needed by the EU if they have processing facilities. He called on EU stakeholders to invest directly in farmers who are prepared.
Mr Amoah stated that the EUDR can enable smallholders to improve their financial situation and access new markets.
Ms Cody reiterated that the EUDR is an opportunity for businesses and smallholders in the cocoa sector. Ms Albrecht added that ensuring smallholder farmers have the adequate data could help create long-term business relationships and access to finance streams.
The panellists agreed that the EUDR could benefit small producers, in particular by giving them better access to markets and financial services. Dr Rajão ended the event with a call to the EU to take a step-by-step approach to EUDR readiness. No policy this complex is ready the first day, and we should foresee “bumps” and complaints as part of the process.
The full webinar is available in French and English. The presentation is available here.
Categorias: Events, EU Regulation on deforestation-free products