The EU Deforestation Regulation (EUDR) and data traceability – how to meet the new requirements?

The EU Deforestation Regulation requires a new level of data traceability for operators in the timber industry. The requirements of the regulation apply to the entire value chain, affecting businesses of all sizes, not only in the EU, but also around the world.

The new requirements of the EU set higher expectations to the timber industry, and demand new levels of traceability from companies in the industry. The EU Deforestation Regulation (EUDR) aims to reduce global deforestation, and prevent the loss of biodiversity. National implementation in EU countries will begin at the end of 2024 for large companies, and in summer 2025 for smaller companies. 

In addition to the new EU regulations, the use of FSC certification is becoming more common, which puts additional pressure on the monitoring of origin data.

Operators that can demonstrate sustainable and deforestation-preventing practices will be particularly attractive partners in the future.

The EU Deforestation Regulation also has an impact outside the EU

One of the key commodities for the requirements of the regulation is timber. The EU Deforestation Regulation requires, among other things, that the production of wood products brought to market has not degraded forests, for example through agricultural use or the destruction of old-growth forests. As the requirements of the regulation apply to the entire value chain from forest to suppliers and downstream processing, it also affects subcontractors, and therefore has an impact on operators in the industry outside the EU.

A centralized information system is a cost-effective and dependable solution for collecting the necessary data and avoiding the risks that incomplete reporting poses for the business.

The obligations of traders under the regulation depend partly on the circumstances of the trade. Although the final implications and guidelines will become clearer with national implementation, many operators need to ensure now that they can meet the requirements and thus ensure the continuity of their operations. There are significant risks to business continuity if the requirements of the regulation are not addressed in time. 

Now is the time to invest in the collection of origin data 

Reporting under the EUDR cannot be done only ex-post, as data must be traceable back to the origin of the raw materials and products. To ensure that data traceability is not interrupted along the value chain, data collection should be systematic and based on reliable technology. Vulnerable practices, such as relying on person-dependent spreadsheets, do not provide a sufficiently reliable basis for reporting in the face of tightening regulations.

The key to meeting regulatory requirements affecting the timber value chain is to start with adequate and consistent practices for collecting and entering data. A centralized information system is a cost-effective and dependable solution for collecting the necessary data and avoiding the risks that incomplete reporting poses for the business. It helps automate data collection and reporting to meet the requirements of the new regulations. Real-time information also supports decision-making, and helps ensure the competitiveness of the company in the eyes of its partners. 

With the monitoring framework in place, future requirements can be easily met. Taking care of origin data is also a sign of sustainability to partners.

Would you like to know more about the regulation and its implications for the timber industry? Read more: How to respond to the requirements of the EUDR Deforestation Regulation in the timber industry? or contact us.

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