Can your company trace commodities back to their production locations?
The EU Deforestation Regulation (EUDR) is a European Union regulation that sets requirements for placing certain products on the market and exporting them. These products must meet deforestation-free and production legality requirements. For companies supplying commodities to the European market, the challenge goes beyond identifying raw material origins. They must also provide evidence that others can trace and verify.
Imagine an Indonesian company that supplies coffee to a buyer in the European Union. The company keeps a supplier list and purchase transaction records. However, when the buyer requests farm locations, land coordinates, and evidence of production legality, the company cannot provide complete information.
This hypothetical situation highlights the challenges of EUDR readiness. Supplier documents alone may not be enough. Companies must also connect information about commodity origins with the relevant supporting evidence.
Why Is EUDR Readiness Not Just the Responsibility of the Sustainability Team?
Several departments usually manage supply chain information. The procurement team manages suppliers, while the operations team records production activities. Meanwhile, the sustainability team collects environmental data, and the legal team manages documentation and regulatory compliance.
However, problems arise when each department stores information separately. A company may already have supplier data, but that data may not connect to production locations, commodity volumes, or legal documents.
Therefore, EUDR readiness requires coordination across different departments. Companies need to assign a clear owner to each piece of evidence. They must also make sure that teams can update and trace the information whenever necessary.
What Evidence Needs to Be Prepared for EUDR?
Regulation (EU) 2023/1115 covers seven main commodities: cattle, cocoa, coffee, oil palm, rubber, soy, and wood. In addition, the regulation covers certain derived products listed in Annex I.
Under Article 9, companies must collect several types of information as part of the due diligence process. These include product identification and description, quantity, country of production, supplier details, legality information, and the geolocation of the land where producers grow the commodities.
The following table outlines the main types of evidence companies need to consider:
| Type of Evidence | Required Information | Potential Data Owners |
|---|---|---|
| Commodity identification | Product type, description, and quantity | Procurement and Operations |
| Supplier data | Supplier identity and origin information | Procurement |
| Geolocation | Coordinates or polygons of production land | Suppliers and Traceability Team |
| Production legality | Evidence of compliance with relevant laws in the country of production | Legal and Compliance |
| Traceability | Links between suppliers, production locations, transactions, and products | Supply Chain and Operations |
Companies must also check these records for consistency. For example, production location information must match the commodities supplied. Similarly, transaction and volume data must remain traceable throughout the supply chain.
How Can Companies Ensure Supply Chain Evidence Is Verifiable?
Before assessing their level of EUDR readiness, companies can review several key areas. The following checkpoints can help identify gaps in their supply chain information:
| Checkpoint | Evaluation Questions |
|---|---|
| Commodity origin | Can the company trace the production location back to the original production land? |
| Geolocation accuracy | Do the coordinates match the actual production location? |
| Data consistency | Do supplier, transaction, and volume records match one another? |
| Legality | Does the company have evidence of compliance with the laws of the country of production? |
| Risk assessment | Has the company assessed and addressed deforestation and non-compliance risks? |
The European Commission explains that the due diligence process has three stages: information collection, risk assessment, and risk mitigation.
Organizations with obligations as operators must complete all three stages. Furthermore, they must ensure that the risk of non-compliance is negligible before placing products on the market or exporting them, in accordance with the applicable requirements.
For further information, read our article on ISCC EUDR Certification and Soy Supply Chain Traceability. It explains the relationship between sustainability certification and deforestation-free supply chain requirements.
How Does EU Regulation Compliance Support Supply Chain Readiness?
Preparing for European Union regulations requires companies to manage documentation, traceability, and sustainability data properly. They also need to understand the requirements that apply to their operations.
Through CBQA Global’s EU Regulation Compliance services, organizations can explore support for EU regulatory readiness. The service scope includes CBAM compliance, INS verification, and ISCC certification audits, according to the applicable service scope.
In addition, International Sustainability and Carbon Certification (ISCC) provides a relevant framework for sustainable supply chains.
Explore CBQA Global’s ISCC & Product Certification services to learn about certification options that may suit your organization’s needs and supply chain requirements.
However, ISCC certification does not automatically replace EUDR due diligence obligations. Therefore, companies must still meet all applicable EUDR requirements.
What Should Companies Check Before Determining EUDR Readiness?
Not all companies have the same obligations. Companies must assess their roles as operators, traders, or other supply chain participants against the applicable regulatory requirements.
Companies outside the European Union that do not place products on the EU market may have different legal obligations. Nevertheless, European buyers may still request information about production origins and supporting evidence.
Furthermore, companies need to check the product codes in Annex I and review the latest updates to the product scope.
According to the European Commission’s schedule referenced in this article, EUDR will apply from 30 December 2026 to large and medium-sized companies, as well as certain micro and small enterprises previously covered by the EUTR. Meanwhile, most other micro and small enterprises will follow on 30 June 2027.
Prepare Your Next Steps with CBQA Global
EUDR readiness involves more than collecting supplier documents. Companies must ensure that they can trace commodity origins, access the required information, and provide supporting evidence for the due diligence process under applicable requirements.
Prepare your next steps with CBQA Global. Contact our team to discuss your EU regulatory readiness and your organization’s EU Regulation Compliance requirements.
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