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Potential EUDR Delay and What It Means for Biofuels

Potential EUDR Delay and What It Means for Biofuels

Significant policy changes may be on the horizon regarding the implementation of the European Union Deforestation Regulation (EUDR).

On October 2, the EU Commission announced its plan to delay the EUDR’s start by a year. This delay must be approved by the European Parliament and the Council before it can take effect, but many experts expect it will pass. If it approved, the new deadlines will be:

  • Large Companies: December 30, 2025
  • Small Enterprises: June 30, 2026

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A Quick Overview of the EUDR

The EUDR aims to reduce deforestation and forest degradation linked to the production of certain commodities. These commodities include wood and wood products, palm oil, cattle/beef, cocoa, soy, rubber, and coffee.

The regulation enforces traceability across the entire supply chain of these commodities. Companies that import, market, or export these commodities and their associated end products within the EU marketplace will be required to provide documentation demonstrating that these products did not contribute to deforestation or forest degradation.

In addition, the regulation requires companies to publicly report on their due diligence system annually and retain all related documentation for a minimum of five years. Records must include descriptions, quantities, dates, and precise geographic coordinates of production plots.

Failure to comply with the EUDR could result in penalties as severe as being prohibited from doing business in the EU marketplace.

Read More: EUDR Law and Commodity Markets: What You Need to Know

Challenges and Criticisms

Stakeholders in impacted industries have expressed concern around the complexity of the EUDR’s requirements and not feeling fully prepared to adjust by the December 30, 2024 deadline.

The American Forest and Paper Association (AF&PA) have voiced their concerns about how challenging it will be for many businesses to comply in time. Other groups, like the National Alliance of Forest Owners and the US Industrial Pellet Association, shared similar concerns in an open letter to the EU Commission last month.

EUDR’s Impact on the Biofuels Market

The emerging market for renewable fuels and biofuels is growing quickly. As mandates and blending requirements take effect, biofuel production will need to expand. To meet this demand, biofuel producers will need to incorporate the use of new production technologies and feedstocks, including advanced feedstocks such as wood residues, wood pellets, and woody biomass.

EUDR compliance will require businesses using wood-based feedstocks for biofuel production to provide traceability records, such as geolocation data, to verify that the land where the wood was harvested meets requirements.

The Time to Prepare for Compliance Is Now

Whether the regulation goes into effect in three months or one year, companies impacted by the EUDR need to start preparing now.

Many businesses typically keep months of inventory or supply on hand, meaning that the commodities they’re trading today may still be in the market when the regulation goes into effect. To avoid future non-compliance issues, companies must ensure that their current and future supplies meet the EUDR’s stringent requirements.

Solving EUDR Compliance Challenges with Forest Trackt from ResourceWise

Ensuring compliance requires a seamless solution to track and verify the origins of wood-based feedstocks. Forest Trackt by ResourceWise is designed specifically to help businesses meet all the requirements of the EUDR.

Forest Trackt enables companies trading wood-based products in the EU to easily track and trace their commodities across the supply chain, from the forest to the marketplace. Its focus is on delivering compliance with the EUDR’s geolocation and reporting requirements, ensuring that all sourced materials are verified as free from deforestation or forest degradation.

With built-in compliance alerts, robust data security, and customizable reporting, businesses can easily maintain compliance without added complexities or administrative bloat.

Forest Trackt was built to help companies overcome compliance hurdles.

Challenge: Geolocation Data for Commodity-Producing Land

Accuracy and consistency in data reporting will be key to complying with the new law. Gathering this data may be difficult and time-intensive, particularly in more remote regions.

Solution: Automated Geolocation Recording

Forest Trackt records precise geolocation information using the accompanying ForestLogger mobile app. Data can be captured and recorded without mobile service, making it an excellent resource in hard-to-reach areas. This solution automates location capture without the burden of manual entry.

Challenge: Tracking Commodities Across the Supply Chain

Regarding global commerce, tracking commodities across the value chain can quickly become a seemingly impossible ask. From processing and manufacturing to distribution, ensuring accurate origin data demands a reliable digital method.

Solution: End-to-End Traceability

Forest Trackt uses a digital tokenization system that accounts for wood materials from the forest floor across the supply chain. This eases the challenge of traceability with no risk of origin ambiguity.

Challenge: EUDR Documentation

Documentation remains a top concern to sufficiently meeting EUDR compliance rules. Companies must gather detailed records of commodities to show they do not contribute to deforestation or forest degradation. This record-keeping could easily become a time-intensive, labor-intensive, and costly process.

Solution: Data Centralization and Secure Transmission

Forest Trackt centralizes all compliance information in one easy and convenient solution. Data is securely synced and transmitted to the EU for compliance. This removes the burden of manual data entry to save time and eliminate the need for added administrative bloat to operations.

Get EUDR Compliance with Forest Trackt

The EUDR is more than just a regulatory requirement. It reflects a firm commitment to moving the world toward more sustainable business practices.

Forest Trackt allows businesses to make these significant strides without interrupting their standard processes and procedures. That way, they can follow the law without adding time-consuming manual effort while contributing to a better future.

Learn how Forest Trackt can simplify your business's EUDR compliance today.

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