Concerns on the EUDR implementation increases as the deadline inches closer

The new EU Deforestation Regulation (EUDR) has been pointed out as an important turning point in the global fight against deforestation. Set to take effect on December 30, 2024, this regulation holds significant implications for countries like Brazil, a major exporter of soybean and beef to EU. With the deadline approaching, producers are concerned about their ability to comply to the policy criteria in time. Yet, it is not just about wanting to or having the right technology; there are several uncertainties about which information will be necessary for operators to prove due diligence.

Brazilian stakeholders recently highlighted four major challenges to the effective implementation of the EUDR for soybean and beef supply chains in the country:

1. Legal complianceand documentation: Upstream business actors in producer countries are currently facing the challenge of furnishing the requisite information and documentation to access EU markets. For the actors involved, it is not clear what kind of documentation and proofs will be accepted by national authorities while verifying the links between products and their declared locations of origin. For instance, what level of risk in the supply chain will be considered acceptable for compliance, and what documents can be used as evidence of compliance with the legislation?

2. Data protection: The EUDR requires that traders and operators report the geographic coordinates of the plots of land where commodities were produced, ensuring they are deforestation-free and not associated with illegal practices. As this implies an increased use of monitoring and verification technologies, concerns exist about how to make information across the supply chain transparent while at the same time anonymising it to ensure data security.

3. Role of national platforms: In cases when national databases and platforms providing information relevant to the legislation already exist, would those be recognized as valid sources of evidence for legality? Example of platforms for the Brazilian case are the AgroBrasil+Sustentável and Selo Verde.

4. Potential rehabilitation: Traders and operators who fail to comply with the legislation – for instance, by selling products from non-compliant regions or producers – might be temporarily prohibited from commercialising their products in the EU. However, it is not clear if there are provisions for rehabilitating producers or regions initially excluded from compliance.

The identification of these four major challenges was the result of a collaborative gathering organized by CLEVER researchers from the University of Bonn, alongside the Agricultural Policy Dialogue Brazil-Germany (APD Brasil Alemanha) and the Universidade Federal de Minas Gerais. Bringing together voices from Brazil’s government, private sector, NGOs, and academia, the discussions revolved around the upcoming EUDR implementation. Split into two teams (soybean and beef), participants discussed topics like traceability progress, ongoing hurdles, associated costs, mitigation plans, transition phases, and ensuring that smallholders aren’t left behind due to traceability requirements. Following this participatory approach to pinpoint challenges and solutions, the outcomes were shared at the ‘European Deforestation Regulation (EUDR): Challenges and Traceability Solutions’ Round Table with the German Federal Ministry of Food and Agriculture (BMEL) in Brasília, Brazil, in February 2024.

Fernanda Martinelli (University of Bonn). Photo credit: Tim Bartram.
European Deforestation Regulation (EUDR)
Challenges and Traceability Solutions. Photo credit: Carlos Alberto dos Santos
CLEVER Project Coordinator Jan Börner (University of Bonn). Photo credit: Carlos Alberto dos Santos
European Deforestation Regulation (EUDR)
Challenges and Traceability Solutions. Photo credit: Carlos Alberto dos Santos.
European Deforestation Regulation (EUDR) Challenges and Traceability Solutions. Photo credit: Carlos Alberto dos Santos.

Written by Fernanda Martinelli / University of Bonn.

New EU commodity trade rules and related challenges for the timber sector – Views from Cameroon 

Imagine you were a vendor selling products on the market. One day, some of your known, old buyers would start demanding assurances that your products fulfil certain requirements; or else, they can no longer buy from you. How would you react? Would you seek to fulfil the new, additional requirements or simply sell your products to other buyers, who demand less? Moreover, how might other concerned actors perceive this situation, such as the government, who regulates the marketplace? 

Together with Dr. Shidiki Abubakar Ali and Herman Zanguim from the University of Dschang, I was part of a research team set out to explore these and related questions in the context of the Cameroon-EU timber trade as part of the CLEVER project. In 2023, the EU adopted new market requirements in the Regulation on deforestation-free products (EUDR) for timber and some other commodities and derived products. For timber, the new requirements expand on rules that have been so far in place as part of the EU Timber Regulation. According to the new rules, timber products can be imported to (or exported from) the EU market only if they are legally produced and free of deforestation and forest degradation. With our team, we discussed emerging challenges and how to address them in Cameroon – a country producing and exporting tropical timber – with actors from State institutions, timber businesses, certification bodies, NGOs and the civil society, international organizations, and research and training institutions. 

A production forest in Cameroon. Photo by Herman Zanguim (UDS)

We found out that awareness of the EUDR is high but knowledge of its details on average is still low among the actors. The EUDR can be seen as complex as it contains a lot of details and technicalities, such as definitions of concepts like deforestation or forest degradation. An issue raised by many was that the EU has poorly communicated about the EUDR and what it might imply for a country like Cameroon. This may, in turn, have led to current lower levels of understanding of the EUDR and even misunderstandings of it, such as that the EU would be encroaching on other countries’ sovereignty with it. 

Different stakeholders in Cameroon also found that the EU had insufficiently involved actors in countries outside of the EU in the development of the EUDR, calling for a more participatory approach. Another point made by many was that the EUDR is perceived as overly restrictive and punitive for countries such as Cameroon that still have large areas of forests standing. Actors said that to achieve meaningful impacts, regulations like the EUDR should be more supportive and incentivizing for better governance in the countries where commodities are produced. According to them, a restrictive and punitive approach that they see with the EUDR is doomed to fail in its implementation due to lack of enabling conditions and support in countries of commodity production.

Logs stored at a sawmill in Cameroon. Photo by Mathias Cramm (EFI)

Timber businesses, on the other hand, did not appear too fussed about the EUDR. They believe themselves to be well prepared for its application, also because of existing EU regulations like the EU Timber Regulation. And what if their products were no longer accepted “as is” in the EU market? Their response was: Demand is high in Asian markets and buyers from African markets are also increasingly knocking on their door. Thus, there might be no shortage of alternative buyers for their timber products. 

It remains to be seen what the real impacts of the EUDR on countries like Cameroon, their timber industry, and their forests will be, after its application begins in 2024-2025. What will happen to the Cameroon-EU timber trade? How will Asian businesses, who import Cameroonian timber and re-export it to the EU, react? Will implementation and enforcement of the EUDR in the EU be possible and effective? Only time will tell, and we’ll hopefully follow the process from the researchers’ point of view. 

Written by Mathias Cramm from the European Forest Institute.

Toward compliance with the EU Deforestation Regulation: Criteria, Tools, and Open Questions

The past decades have seen a global increase in the production and trade in agricultural and forest-based commodities linked to deforestation and other socio-environmental risks. Different forms of governance have emerged to attempt regulation of these commodity supply chains to halt deforestation and ensure sustainable land-use change. In June 2023, the EU Deforestation Regulation (EUDR) was adopted, requiring EU companies to ensure that certain products imported to the EU are not associated with deforestation. The EUDR aims to minimize the EU’s contribution to deforestation and forest degradation worldwide. As such, it is intended to help reduce greenhouse gas emissions and biodiversity loss as stipulated in the European Green Deal. As the EUDR enters into force, many questions arise as to how the value chains of major globally traded commodities can become compliant.

With this in mind, the CLEVER and RAINFOREST partner Bonn.Realis organized a workshop called “Toward compliance with the EU Deforestation Regulation: Criteria, Tools, and Open Questions” on November 13, 2023, joining participants both online and in person, at the Center for Development Research, University of Bonn. More than 60 stakeholders joined, mainly from Germany, Brazil, but also other international actors, representing all sectors – public authorities, private companies, certifiers, NGOs, company associations, and research organizations. The workshop aimed at providing a space for discussion and exchange, identifying knowledge and capacity gaps to comply with the EUDR as well as opportunities for future collaboration toward improving supply chain sustainability. The workshop focused on Brazil as a key supplier to the EU and three specific commodities covered by the EUDR (i.e. beef, soy, and wood).

Under Chatham House Rules, participants discussed two fundamental questions:

  1. What challenges must be overcome in the three value chains in order to achieve compliance with the EUDR and related due diligence policies?
  2. Which tools and support mechanisms are in place or being developed to overcome these challenges, especially as regards IT solutions, certification schemes, and the mutual recognition of administrative and control systems?

The workshop provided a solid overview of what operators in both regions as well as competent enforcement authorities in the EU can build on in terms of traceability systems and tools for compliance. We also gathered valuable information on areas where stakeholders require further clarification and guidance to align effectively with the new regulatory conditions. Questions around traceability, risk assessment and mitigating measures, supply chain segregation, and transaction costs dominated the debates in separate breakout groups for the three commodities. Considerable uncertainty exists as to the quality standards that competent national authorities and third parties may apply to evaluate future due diligence efforts of operators. There was also an emphasis on a pre-competitive collaboration among operators and service providers in order to generate accessible traceability solutions for all actors of the supply chain.

In sum, we have learned a lot about the challenges that key stakeholders involved in the implementation of the EUDR still need to overcome until its rules will apply from 30th of December 2024. A summary paper synthesizing the workshop’s main results will be prepared and some authorities have already signaled interest in feeding these results into ongoing consultations. Beyond contributing to the implementation process, these results will also feed into CLEVER’s research on policy analysis (WP4, 5) and stakeholder engagement (WP8).  

Written by Rafaella Ferraz Ziegert (UFR) and Jan Börner (UBO).

Photo by Rafaella Ferraz Ziegert (UFR).

Mapping international and local forest and ecosystem-related policies and governance mechanisms

Exciting News! Our CLEVER researchers Laila Berning, Rafaella Ferraz Ziegert, Mathias Cramm and Metodi Sotirov published their latest research. They conducted a comprehensive analysis of forest and ecosystem-related policies and governance mechanisms.

Through extensive research and data analysis, they have compiled a comprehensive Excel database and identified six overarching policy and governance types. These types cover various levels of compulsion, actor participation, and geographical scopes, helping us better understand the regulatory landscape of regulating biomass supply chains for legality and sustainability at international and local levels!

Stay tuned for more insights into a selection of policies and governance mechanisms from the EU, Brazil, Cameroon, and Gabon! 

The following research activities will largely focus on the influences of the new EU Regulation on deforestation-free products (EUDR). The researchers will see how enterprises, NGOs and state actors react to the EUDR. They will also dive deep into analyzing the role of national policy and governance initiatives from Brazil, Cameroon and Gabon under and beyond the EUDR. 

These research activities will help us better understand the unfolding impacts of the EUDR and the implications for deforestation, forest degradation and biodiversity loss. Their insights will support identifying how global agricultural and forest commodity value chains can become more sustainable, both in terms of socio-economic and environmental impacts.

Get all the details here:

Final report: https://doi.org/10.5281/zenodo.8328016

Excel database: https://doi.org/10.5281/zenodo.8326909

Written by Laila Berning – University of Freiburg

Image by witsarut/AdobeStock

Efforts to fight global deforestation need trust-building dialogue

CLEVER representatives met with policy makers, civil society and other academia stakeholders on 13th of June in Berlin to discuss the new rules on sustainability of international agricultural value chains. The focus was at the EU’s landmark decision on its deforestation regulation in December 2022, and the impacts in Brazil. This regulation intends to increase the consumption of ‘deforestation-free’ products, by prohibiting specified commodities and products from being imported into the EU. If in one hand, the regulation comes with a good intention and in a proper political momentum for Brazil, on the other hand, such a unilateral measure can promote a “diversion trade”, which means, Brazil can shift their exports to a less demanding trading partner with lower incurred costs. Other points raised at the meeting were the lack of scientific evidence on the effectiveness of this type of policy, and the challenge of tracing the product from the plot of land to the EU.

Among the solutions, one word was often repeated and took centre stage: “partnerships”. Partnerships to develop traceability tools, platforms, and to increase the interoperability between traders. Overall, partnerships to support exporter governments to improve their own efforts to conserve the forest. One thing is clear: without this joint effort, the final goal of decreasing deforestation cannot be achieved. That is why, while the new EU regulation is not into force, all relevant stakeholders are increasing the dialogue to prepare the ground to conduct strict due diligence. In this setting, CLEVER project results will be key to provide to those stakeholders evidence-based information on potential impacts of this new regulation in both sides of this trade coalition.

The event was hosted by SWP, organized by APD Brasil, and supported by the GFA Consulting Group, IAK Agrar Consulting, GIZ, and BMEL.

Photo by Fernanda Martinelli

Written by Fernanda Martinelli – University of Bonn

Featured image by Adobe Stock/FootageLab

New paper on corporate accountability in commodity supply chains under the EU Deforestation Regulation

CLEVER Researchers Laila Berning and Metodi Sotirov (University of Freiburg) published the paper “Hardening corporate accountability in commodity supply chains under the European Union Deforestation Regulation” in the Wiley Regulation & Governance journal.

They analyze the EU Deforestation Regulation by drawing on accountability scholarship and institutionalist theories of regulation. The results show that the Regulation aims to enhance corporate accountability mechanisms through mostly state-based hard regulation of commodity supply chains, reducing the role of market incentives and private regulation. 

Read the paper here: https://doi.org/10.1111/rego.12540

Image by Adobe Stock/Stratocaster