The European regulation on deforestation will come into force in less than five weeks. Since December 30, economic operators must prove that products made from specific raw materials do not deforest.
Products, whether they contain palm oil, chocolate, coffee, soy, beef, wood or rubber, will also have to be grown according to where they are produced.
The remaining time is limited, but some sectors are in a more favourable situation than others. Which product, excluding wood, rubber and beef, is best prepared for the EUDR and which is least?
EUDR prepared palm oil
Interestingly, the product best prepared for the impending EUDR date also has a reputation for being a food responsible for deforestation: palm oil.
Recently, research in northern palm oil importing countries revealed that Most consumers associate the environmental impact of palm oil with its productionFor example, “harmful to the environment” or “destruction of the rainforest”.
This tarnished reputation, earned due to irresponsible sourcing methods and being a major driver of deforestation in biodiversity hotspots, likely also helped prepare the industry for the EUDR.
Charlotte Opal is Director of Partnerships and Membership at the Earthworm Foundation, an NGO that works with businesses to promote sustainable practices.
Are there any unexpected effects?
There are concerns that some operators will choose less risky suppliers, both by limiting their number in supply chains and by choosing lower-risk regions to more easily comply with the EUDR.
Deforestation is likely to continue if smallholder farmers ignore the problem.
EUDR Product Evaluation
EUDR includes palm oil, cocoa, coffee, beef, soybeans, rubber and timber.
FoodNavigator focuses in this article on palm oil, soy, coffee and cocoa.
Earthworm Foundation observed that in the palm oil industry, European supply chains were “moving” to create a separate supply chain from plantations that had been established “well before” the deadline. European operators appear to prefer supply chains that have a minimum number of smallholders to avoid having to submit complex administrative formalities.
From a bureaucratic perspective, this suggests that the EUDR has unintended consequences.
Opal adds: "This is an unfortunate side effect of regulation."
What is less prepared, cocoa or espresso?
Palm oil is better prepared to cope with EUDRs than cocoa or coffee. Palm oil has been the subject of public scrutiny in recent years, but neither cocoa nor coffee has been.
There are similarities between the supply chains of cocoa and coffee – both of which grow under the canopy of rainforests – but there is a “significant” difference, particularly in terms of traceability.
Michelle Deugd of the Rainforest Alliance, a certification body, said most certified coffee supply chains already operate at levels of traceability that allow for timely compliance.
However, smallholder countries may find this more difficult to achieve.
Earthworm Foundation found that some coffee-producing countries were better prepared than others. Opal reveals that “there are great initiatives at the national level, like what the Tanzanian government is doing to map all coffee producers; we would like to see more of that.”
It seems that many traders do not share data pre-competitively, so there is a lot of “duplication” as multiple companies collect the same information from the same farmer.
Cocoa could be the leader in geolocation, while coffee takes first place in traceability.
According to Duegd, RA, the majority of cocoa supply chain traceability is not EUDR compliant.
Cocoa, in some ways, is ahead of the curve. RA observed that cocoa is more advanced in collecting geolocation information than coffee, thanks to previous industry initiatives that have advanced the collection of such data in some cocoa-producing countries.
According to Duegd, smallholders must be supported by the EUDR to be able to adapt. RA is also concerned about the unintended effects of the new European regulations on deforestation.
The EU relies on small farmers to import products from many countries. We have been informed that losing access to the EU could have serious economic and social impacts on communities that depend on exports.
EUDR aims to encourage best practices. However, some smallholders face an income gap and may feel compelled to expand their forest to sell more cocoa or sell it in markets with lower standards to support their families.
What about soybeans? Are you ready for EUDR?
Unlike palm oil, coffee and cocoa, large-scale farmers dominate soybean production. More than 80% of the soybeans produced in the United States, Brazil and Argentina (which account for the majority of total production) are grown by large-scale farms.
The soybean industry, dominated by large producers and considered one of the industrialised products of the EUDR, has a long way to go before it is compliant.
Are seven EUDR products enough?
Seven commodities are currently covered by the new EU deforestation regulation. These include palm oil, chocolate, soybeans, beef, wood and rubber. Some say corn is not on the list.
According to environmental group Fern, corn (also called maize) is a significant contributor to deforestation.
Fern's Forests and Agriculture Campaign Manager Julia Christian recently told FoodNavigator.
The Earthworm Foundation argued that while major producing countries have already mapped their farms, "surprisingly little" work has been done on supply chain traceability for such a well-resourced industry.
We can see that these sectors are really in turmoil.
Why? Opal from Earthworm suspects that the vast size of the soy supply area could be a possible explanation. The EUDR has identified the soy industry's supply chain as being of low complexity.
The cocoa, coffee and rubber industries also have complex supply chain systems, but they are moving faster than the soy industry in some ways.
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