Global commodity traders prepare for EUDR compliance amid implementation challenges
The trader outlines how it has been proactively engaging with and supporting its suppliers, particularly smallholder producers, to address the challenges of implementation. “These challenges include polygon data collection and sharing for supply chain traceability, as well as securing land ownership titles,” an LDC spokesperson told this publication.
Amid pending issues with EUDR implementation, LDC anticipates receiving further guidance from the EU Commission well in advance of the regulation's effective date.
To ensure all its suppliers comply with various commodity-specific sustainability codes and policies, the trader has developed a comprehensive due diligence, monitoring, and grievance system, added the representative.
The EU Deforestation Regulation (EUDR), which came into force in June 2023, aims to ensure that products consumed by EU citizens do not contribute to deforestation or forest degradation. Covering seven commodities and their derivatives, it impacts all corporate stakeholders in the EU involved in the commercialization of these products.
This week, ADM, another major global commodity trader, reported its capability to deliver fully verified, segregated, and traceable soybean meal and oil to meet European customers' needs as the EUDR becomes effective on December 30.
"Thanks to the critical participation of our farmer network and our dedicated US elevators, along with segregated transportation and logistics capabilities, we are positioned to supply all our existing customers in Europe with soybean meal and oil once the new rules go into effect at the end of this year," said Sebastian Kuck, general manager of EMEA soy crush.
These indications of trader readiness may help alleviate some of the lingering concerns about EUDR implementation in the animal feed value chain.
However, ADM has also acknowledged that the industry is still awaiting final guidance on the regulation from the EU Executive.
Soybean quotes
With EUDR data platform technology issues and numerous details about certification still unclear, AFP news reported last week that importers were worried about ensuring adequate soybean supplies for feed formulations in Europe.
David Saelens, animal nutrition lead at France’s Cooperation Agricole, told that outlet: "There are currently no price quotes for soybeans for 2025."
This lack of pricing information is preventing buyers from estimating next year's costs, posing organizational problems for factories producing animal feed and creating risks of supply shortages and higher prices, he added.
Detangling the deforestation rules
Meanwhile, a review published last month by the World Business Council for Sustainable Development (WBCSD) attempts to detangle the rules for stakeholders.
The Council outlines three concrete steps for companies to ensure compliance by December 2024. It urges them to:
- Identify commodity exposure to EUDR compliance.
- Conduct a risk assessment on the origin of the product against 14 risk criteria. Any identified risk needs to be mitigated before goods can be imported to the EU.
- Map supply chains and commit to a product traceability and data collection system. Engage with suppliers, as they will be key in obtaining the required information.
According to the Council, the law is a pivotal step toward combating deforestation on a global scale, affecting numerous companies across the value chain.
It says that by requiring companies to collect and transparently disclose detailed data on their supply chains, the EUDR aims to mitigate the negative social and environmental impacts of their products and drive positive change.
