The European Commission (EC), created last week, has announced its plans to implement the new European Union budget. There is a slight delay.The EUDR (European Forest Deforestation Regulation) has been extended by 12 months. The European Parliament must approve the draft law before it can be implemented. If the European Parliament does so, the law will apply to large and micro companies from 30 June 2026 and 30 December 2025 respectively.
The industry is pushing for a delay in implementing the regulation. It imposes high compliance costs on companies that are forced to track their products through complex supply chains.
The EC also published a You can also learn more about the following:Document to help comply with the regulations. The document was intended to explain some of the main aspects of the regulation. We summarize the key points below.
What exactly is a forest?
The EUDR defines a forest as an area with trees larger than 0.5 ha, with a canopy cover of at least 10 %, and trees with an average height of more than 5 metres. (The regulation applies even if the trees have not yet reached these requirements). The EUDR excludes any land used primarily for agricultural purposes or as urban land.
What is an operator?
In the EUDR, an operator is any natural person or company that places products on the market, making them the first to be available in a commercial transaction. This may include the manufacturer or producer of products and raw materials manufactured within the EU. This concerns products and raw materials that are produced outside the EU. It does not matter who is the owner or producer of the product/raw material.
An operator may also be a person who exports relevant goods or products from the EU.
Operators are only those who have been certified. investmentA raw material or product is first made available on the EU market by a trader. A trader is someone who makes a product or raw material available to the public on other occasions. A trader may be any person who is not the operator and who makes relevant products or raw materials available to the public in the course of a commercial activity.
You are an operator if you place a product. You can also learn more about A product is a tradable item. Examples of operators include those who import cocoa beans into the EU, as well as those who create and sell chocolate bars containing cocoa.
What are the obligations of an operator?
Operators must ensure that they comply with the EUDR by carrying out due diligence.
Due diligence is the process of obtaining information from suppliers about raw materials or products that are subject to EUDR. The operator must then verify, analyse and evaluate the information to determine the risk and adopt mitigation measures if necessary. The risk assessment of products manufactured from raw materials from multiple locations must include all locations.
The level of risk is often determined by the risks of the area or country of origin of the product, as well as the risks of the product itself, its complexity, the past activities of the actors in the chain (whether these companies have been linked to deforestation in the past), and whether or not the product was manufactured in compliance with local laws.
A product may be considered to have a “negligible” risk of non-conformity after undergoing risk assessment and mitigation. This means that there is no reason for concern.
SMEs or non-SME suppliers of low-risk products are not required to carry out all the prior risk mitigation checks described in Articles 10 and 11 of the EUDR, unless there is reason to believe that the product may be non-compliant.
A non-SME supplier further down the supply chain only needs to confirm that appropriate due diligence has been carried out upstream without having to review every document.
Non-SME traders are required to confirm that due diligence has been carried out upstream. The SME trader is not required to carry out due diligence, nor to confirm that it has been carried out upstream. However, they must ensure the traceability of their products by collecting and storing traceability data.
Operators should evaluate their due diligence systems at least once a year to ensure that procedures are followed, processes are effective and required outcomes are achieved. Due diligence systems should be updated if operators become aware of any changes that may affect their objectives.
What are the EUDR due diligence requirements in relation to the CSDDD?
The EUDR is an excellent tool to complement the Directive on corporate sustainability due diligenceRecently, the Parliament adopted a new law. The due diligence obligations of the CSDDD concern large companies, but the requirements of the EUDR are specific and apply to products or risks. In case of conflict between the CSDDD and the EUDR, the EUDR will prevail.
What are the risks associated with a complex supply chain?
The EUDR lists the “complexity” of the affected supply chains as a risk factor. The EUDR lists this as a risk factor because the complexity of a supply chain can make it difficult to trace products back to their source, increasing the likelihood that the product will be non-compliant.
The risk level may be considered high if there are unidentified stages in the supply chain.
Operators and traders can determine the level of complexity of a supply chain by considering whether there have been multiple processors or steps before the product is placed, available or exported on the Union market. They should also consider whether the product includes relevant raw materials from different countries or parcels of land; and similarly, whether the product contains multiple relevant products.
What raw materials are covered by EUDR?
The EUDR includes seven raw materials, including cocoa, palm oil (coffee), soybeans, rubber and wood.
The obligations of this Regulation will not apply if a product or raw material is placed on the market between 29 June 2023 (date of entry into force) and 30 December 2020 (recommended deadline). It includes all products that have been placed or made available on the market after the entry into force of the Regulation, but which are entirely manufactured from products or raw materials placed on the markets during the transition period.
Small or micro enterprises have an additional six months to comply. This means that after the implementation of the regulation, if the medium or large enterprise places the product on the market. They are not for youMade entirely from products and raw materials that the micro or small business has put on the market. His ownDuring the transition period, medium and large companies are still exempt. The company must prove this.
EUDR does not cover waste. EUDR does not cover by-products such as palm kernels and empty fruit branches. are, As well as waste covered by Annex 1 of the EUDR, including cocoa shells, pods, skins and other cocoa products.
When can the affected products enter the EU market?
Affected products must not be placed on the market or made available until it has been verified that they are not derived from deforestation, are covered by an appropriate due diligence report and are produced in accordance with the laws of the country where they were manufactured.
Relevant laws include those covering the legal status of the production area, as well as those specifically aimed at stopping deforestation. The guide gives examples of land rights (including indigenous land rights), labour rights and environmental protection. Documentation is required to demonstrate compliance with these laws as part of the due diligence process. Additional verification may be required if the documents come from a country with high levels of corruption.
What is the relationship between certification systems and third-party verification systems?
Some third-party certification and verification systems will give consumers assurance that certain products meet certain standards.
The EUDR recognises that such systems can be useful in providing information that can help ensure compliance. They are not a substitute for operators' due diligence.
Operators intending to use these schemes to ensure compliance should ensure that they are compliant with EUDR requirements, including the deforestation-free definition, geolocation requirements and legal production. Operators should also assess the transparency and credibility of these schemes.
What does “agricultural use” mean?
The EUDR prevents certain products from being placed or sold on the EU market if their production is linked to deforestation occurring after 31 December 2020. The conversion of forest land for agricultural purposes, whether of human origin or not, constitutes deforestation.
According to the EUDR definition, the conversion of forest land for purposes other than agriculture does not constitute “deforestation”. These purposes include forest fire prevention, alien species management, and urban infrastructure, such as power lines or settlements, roads or cities.
The land must have a defined agricultural use, such as being used to plant crops, raise livestock or be temporarily fallow. Land that has been set aside for agricultural purposes is considered “agricultural” for ten years. However, this period can be extended to fifteen years if there are specific reasons why it is not possible to resume farming, such as flooding, lack of water or unavailability.
Agricultural use includes all land used for permanent or temporary crops, permanent or temporary pastures or meadows, as well as agricultural buildings, farmyards or poultry yards. For the purposes of this Regulation, agroforestry systems also fall under the agricultural use category.
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