Complying with the New EU Deforestation-Free Regulation: A Guide for European Shippers

Your roadmap to seamless compliance with the EU's new deforestation regulation using Logward's no-code solutions.

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Every minute, forests equivalent to the size of 27 football fields are lost to deforestation. This alarming rate accelerates climate change, erodes biodiversity, and disrupts the livelihoods of millions. Recognizing the urgency of this crisis, the European Union has introduced the EU Deforestation-Free Regulation (EUDR), set to take effect in January 2025. This regulation aims to ensure that commodities linked to deforestation neither enter nor exit the EU market.

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For European shippers, this presents both challenges and opportunities. Non-compliance could result in hefty fines, operational disruptions, and reputational damage. However, proactively adapting to these new requirements allows shippers to avoid penalties, enhance their sustainability credentials, and meet growing stakeholder expectations for environmental responsibility.

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This article provides an overview of the EUDR, its implications for shippers, and practical steps to achieve compliance. We will also explore how Logward can simplify this process, allowing you to focus on your core business while ensuring full compliance.

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Understanding the EU Deforestation-Free Regulation

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What Is the EUDR?

Regulation (EU) 2023/1115, commonly known as the EUDR, is a legislative measure adopted by the European Union to combat global deforestation and forest degradation. It targets the import and export of specific high-risk commodities associated with deforestation:

• Cattle
• Cocoa
• Coffee
• Palm Oil
• Soy
• Rubber
• Wood

Derivatives of these commodities—such as leather, chocolate, tires, and furniture—are also included. The regulation mandates that these products must be "deforestation-free," meaning they were not produced on land deforested after December 31, 2020.

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Why Was the EUDR Introduced?

Between 2010 and 2015, the world lost an average of 4.7 million hectares of forest annually, primarily due to agricultural expansion. Deforestation significantly contributes to climate change—accounting for about 15% of global greenhouse gas emissions—and threatens biodiversity. As a major consumer market, the EU plays a significant role in driving demand for commodities linked to deforestation. The EUDR aims to reduce this impact by ensuring that products consumed within the EU do not contribute to global forest loss.

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The Impact on Shippers

The EUDR extends beyond producers and suppliers to all entities involved in the supply chain, including shippers and logistics providers. If your company transports any of the regulated commodities within the EU or uses wood-based packaging, this regulation directly affects your operations.

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Compliance requires more than a cursory check of your cargo. It involves a detailed understanding of the origins of the commodities you transport, meticulous documentation, and ongoing monitoring. Failure to comply can result in severe penalties, including fines up to 4% of your annual turnover, confiscation of goods, and potential bans from operating within the EU market. Beyond legal repercussions, non-compliance can damage your reputation and erode trust among customers and stakeholders who increasingly value environmental responsibility.

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Challenges in Achieving Compliance

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Complex Supply Chains

Modern supply chains are intricate, often spanning multiple countries with varying legal systems, languages, and standards. Tracing the origin of commodities back to specific plots of land can be daunting. For instance, a shipment of cocoa might involve farmers in West Africa, processors in Asia, and distributors in Europe, adding layers of complexity to compliance efforts.

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Administrative Burden

The EUDR's documentation requirements are extensive. Shippers must collect, verify, and manage substantial information, including geolocation data, supplier details, and proof of legal land use. This demands significant time and resources, potentially diverting attention from core business activities.

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Resource Constraints

Many shippers may lack the internal expertise or technological infrastructure to implement the required due diligence processes effectively. Smaller companies might find it challenging to allocate the necessary resources without affecting their operations.

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Practical Steps to Achieve Compliance

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Despite these challenges, shippers can take strategic actions to ensure compliance with the EUDR.

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1. Conduct a Comprehensive Supply Chain Audit

Begin by creating a detailed inventory of all commodities you handle. Identify which are subject to the EUDR and assess the associated deforestation risks. This involves evaluating not just the commodities but also their origins. Prioritize commodities sourced from regions with high deforestation rates, such as palm oil from Southeast Asia or cocoa from West Africa.

Engage with your suppliers to understand their compliance readiness. Assess their ability to provide necessary documentation, such as geolocation coordinates and sustainability certifications. Open dialogue can help identify potential risks early and foster a collaborative approach to compliance.

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2. Implement Robust Due Diligence Processes

Develop a due diligence system that aligns with the EUDR's requirements. This system should include:

• Information Collection: Gather comprehensive data on commodities, suppliers, and production sites. Standardize this process using templates and checklists to ensure consistency.
• Risk Assessment: Evaluate the likelihood of non-compliance based on factors like country of origin, commodity type, and supplier history. Use reliable data sources, including official databases and satellite imagery.
• Risk Mitigation: If you identify risks, take appropriate actions to mitigate them. This might involve sourcing from alternative suppliers, requiring additional certifications, or implementing stricter contractual obligations.

Document every step thoroughly. Accurate records are essential not only for compliance but also for demonstrating your commitment to sustainable practices.

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3. Strengthen Collaboration with Suppliers

Compliance is a collective effort that requires strong partnerships with your suppliers. Incorporate EUDR compliance clauses into your contracts, clearly outlining each party's responsibilities. Provide guidance and resources to help them meet the necessary standards.

Regular communication is key. Establish open channels for dialogue, updates, and feedback. This collaborative approach can enhance trust, improve efficiency, and ensure alignment towards common goals.

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4. Leverage Technology Solutions

Technology can simplify compliance by automating data collection, real-time tracking, and managing documentation. However, traditionally coded systems, especially during regulatory disruptions like the recent Supply Chain Act, often strain IT resources, pulling capacity from strategic projects and causing delays. Additionally, hiring external development resources to meet demand adds costs.

No-code solutions offer a more agile alternative by minimizing the need for specialized IT resources. These systems allow companies to adapt quickly to regulatory changes, easing the burden on IT teams while driving strategic projects forward and controlling costs.

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Preparing for the January 2025 Deadline

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The January 2025 deadline for EUDR compliance is approaching rapidly. Early action is essential to meet all requirements without rushing.

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Start Early

Beginning preparations now gives you ample opportunity to address challenges, refine processes, and train your team. Early preparation reduces the risk of last-minute issues that could jeopardize compliance.

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Prioritize High-Risk Areas

Focus your initial efforts on commodities and regions with the highest deforestation risks. By tackling the most significant challenges first, you can mitigate potential impacts on your operations.

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Implement Continuous Improvement

Compliance is an ongoing commitment. Regularly review and update your processes to adapt to changes in regulations, market conditions, and supply chain dynamics. Stay informed about industry developments and emerging best practices.

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How Logward Can Help

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At Logward, we understand the challenges shippers face in complying with the EUDR. Our solutions simplify the process by offering powerful tools that enable you to meet compliance requirements without disrupting your operations. With no-code solutions, Logward helps you quickly adapt to new regulations without consuming valuable IT resources or causing project delays. By using flexible and agile systems, you can stay focused on your core business while remaining compliant.

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Our Table Editor allows for rapid implementation of new requirements. The Supplier Mapping Table, built through LookUp, ensures that the origin coordinates of your products are fully integrated into your supply chain system. By mapping these details onto your purchase orders and transferring them to transport orders when consolidating shipments, you achieve seamless orchestration of critical data fields—without the need for IT resources or project delays.

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Our 100% rule-based approach ensures that compliance is handled systematically and efficiently. With our expertise, you can focus on your core business while we manage the complex compliance workflows.

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Conclusion

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The EU Deforestation-Free Regulation represents a significant shift towards sustainable trade practices. While it introduces new responsibilities for shippers, it also offers an opportunity to lead in environmental stewardship. By embracing these requirements, you not only avoid penalties but also enhance your company's reputation and contribute positively to global efforts against deforestation.

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Achieving compliance does not have to be overwhelming. With the right approach and the support of innovative technology solutions like those offered by Logward, you can navigate the complexities confidently and efficiently.

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Ready to simplify your EUDR compliance journey? Schedule a free consultation with our experts to explore how we can help you achieve seamless compliance and maintain smooth operations.