Regulation on Deforestation-free products
The implementation of the new EU regulation on Regulation on Deforestation-free products (EUDR) poses new challenges for initial distributors. After the Supply Chain Due Diligence Act (LkSG), this is the next major task that regulates the supply chain from an environmental and social perspective. You can view the current status in this area.
Overview
On June 29, 2023, the EU regulation for deforestation-free supply chains came into force, which prohibits the trade of raw materials and products that cause deforestation and forest degradation.
According to the press release of the EU Parliament of 14.11.2024, the date of application will now be postponed as shown on the side.
Deforestation-free products are products that are produced on areas that were not deforested after the 31st of December 2020 or for which no forest damage took place after the 31st of December 2020.
Which raw materials or downstream products are affected?
Relevant raw materials
The Regulation currently covers the raw materials listed below, which, according to thorough analyses, are considered to be the main cause of deforestation due to the expansion of agriculture. This list is reviewed regularly and revised as necessary to take account of changing patterns.
Oil palm, soy, wood, beef, cocoa, coffee, rubber
Relevant downstream products
Products containing these raw materials or animals fed with these raw materials are also affected. Here are a few examples:
- Beef: live animals, meat, offal, leather prepared after tanning or drying
- Cocoa: raw or roasted cocoa beans, cocoa mass, cocoa butter, chocolate
- Oil palm: palm oil, palm kernel oil
- Rubber: tyres made of rubber, clothing and clothing accessories for all purposes made of soft rubber (e.g. gloves)
- Wood: charcoal, furniture, paper
How can Markant support you?
Markant supports you in meeting the EUDR requirements with our comprehensive expertise and extensive network. As a leading EDI service provider, we already network numerous suppliers and retailers for the efficient exchange of orders, dispatch advices and other message types. Markant offers:
- Strong network: Use our established network to gain immediate access to numerous partners.
- Detailed questionnaire and data collection support from your partners.
- Support from Markant‘s specialized customer service team.
- Organization and communication with your suppliers for comprehensive risk assessments.
- Complete EDI support: We offer an EDI solution for companies that want to embark on the path to EDI competence.
Requirements resulting from the Regulation
Relevant raw materials and products may only be placed on the market, made available on the market and exported if the following three requirements are met:
- They are deforestation-free.
- They have been produced in accordance with the relevant legal provisions of the country of production (human rights, labour law, anti-corruption laws, nature conservation laws, etc.).
- A declaration of due diligence is available.
Before relevant products are exported, placed on the market or made available on the market
1. information, data and documents must be collected to prove that the above three points have been fulfilled:
This includes, for example, the following information:
Precise description, quantities of products, list of all relevant raw materials/products included or used for production; addresses of companies from which products were sourced and addresses of all companies to which products were supplied; geolocalisation of all land used for production; conclusive and verifiable information that products are deforestation-free and that the country's legislation has been complied with.
2. risk assessments of the information and documents must be carried out by the companies for conformity.
Relevant products may only be placed on the market or exported if the risk assessment shows no or only a negligible risk that the products are non-compliant.
For example, the following criteria must be taken into account:
- Individual risk (as categorised by the EU Commission) of the producer country
- Presence and cooperation of indigenous peoples
- Source, reliability and validity of the information collected
- Concerns about the producer country (corruption, lack of criminal prosecution, respect for human rights, etc.)
- Complexity of the supply chain and processing stage of the relevant products (allocation of properties)
- Prevalence of deforestation or forest degradation
- Risk of circumvention of the EUDR or risk of mixing with products that have been created with the help of deforestation
- Conclusions of the Commission's expert group
The affected companies must document the risk assessment and review it at least once a year and make it available upon request. The risk assessment must also be comprehensible.
3. risk minimisation measures must be initiated.
If the risk assessment shows that there is a non-negligible risk, the market participant must initiate measures to minimise risks (audits, request for additional documentation).
Due diligence declarations in accordance with Annex II of the Regulation must be submitted to the competent authorities prior to placing on the market or export.
By submitting the due diligence declaration, the market participant assumes responsibility for ensuring that the products comply with the Regulation. A fulfilled due diligence obligation upstream in the supply chain does not release subsequent market participants from the obligation to fulfil the due diligence obligation on their part.
In order to comply with due diligence, a framework of procedures and measures must be put in place and kept up to date by market participants = "due diligence system".
The due diligence system must be reviewed at least once a year to ensure that it is up to date, and records of this must be kept for at least five years.
Non-SME market participants must report annually in as much detail as possible, in a publicly accessible manner, on their due diligence system.