FEDIOL and COCERAL issue guidance to aid compliance with EUDR, amid growing uncertainty
The regulation, designed to curb deforestation associated with certain commodities entering the European market, imposes stringent requirements on businesses.
COCERAL, representing the trade in grains, oils, and agrosupplies, and FEDIOL, representing the EU vegetable oil and protein meal industry, expressed frustration with the EU Commission and member states for failing to provide timely clarifications on key aspects of the regulation.
With only 100 days left before the EUDR comes into effect, the associations say that many companies in their sectors still lack clear guidance on how to meet compliance requirements.
"Targeted commodities have been harvested, processed, and will soon be shipped, but we have no certainty about the requirements to prove compliance.”
The lack of clarity, they warned, is having a significant negative impact on market players' preparations and could disrupt the availability of targeted commodities and derived products on the EU market, potentially affecting food security and the competitiveness of the agrifood sector.
Legislative process
In November 2021, the EU Commission introduced the Proposal for a Regulation on deforestation-free products, establishing mandatory due diligence and a marketing prohibition to help curb deforestation by cleaning up EU supply chains linked to deforestation.
The EUDR officially came into force in June 2023, and is set to be applied from December 20, 2024. FEDIOL, COCERAL and FEFAC, throughout the legislative process, provided input to European institutions and continue to do so in preparation for the regulation’s implementation.
In a 2023 opinion editorial, FEDIOL emphasized the need for clear guidance and legal certainty for proper enforcement of the law. Many questions from member companies regarding EUDR provisions have been gathered to address ongoing uncertainties. FEDIOL says it has proposed solutions to align key provisions with supply chain realities, which have been shared with authorities. Following the participation of several of its member companies in the pilot testing of the Information System, adaptation requests were submitted to ensure the system’s critical functionalities meet business needs.
The Commission also established the ‘Multi-Stakeholder Platform on Protecting and Restoring the World’s Forests’ to facilitate discussions on the regulation, where FEDIOL is actively involved. “However, the responses provided by authorities and collected on the dedicated EUDR platform have been too slow and remain insufficient," according to the trade group.
Workable approaches
The newly released guidance document reflects FEDIOL and COCERAL’s understanding of the legal requirements, based on informal and non-legally binding feedback from the Commission and national authorities. However, the trade bodies emphasized that the recommendations do not constitute legal advice and are not intended to bind their liability.
In areas where the Commission and member states have yet to provide detailed guidance, the associations have suggested workable approaches to compliance. These sections, marked in the document, highlight where further clarification or legal solutions are still awaited.
FEDIOL and COCERAL underscored that the guidance is not final but will evolve as more information and official interpretations emerge, making it a living document that will be regularly updated.
They hope the guidance will spur the Commission and member states to provide the necessary clarifications and solutions before the regulation comes into force. Both organizations stress the urgency for harmonized guidance to avoid further disruption.
EUDR - what products are in scope
From January 1, 2025, the EUDR will require organizations placing relevant products, notably soy, palm, and beef, onto the EU market to prove that their goods do not originate from recently deforested areas or contribute to forest degradation.
Companies exporting any of the affected commodities into the EU will need to demonstrate they have carried out due diligence checks to confirm that the products have not been sourced from land which was deforested or degraded after December 31, 2020.
While the focus is on the major commodity traders, the regulation also applies to farmers and processors who are placing beef on the EU market. There is a requirement to provide evidence of soy and palm feed sources, with obligations for SMEs delayed until 30 June 2025.
Dairy products are specifically excluded from the scope of the regulation; however, dairy producers could be affected where dairy cattle are slaughtered for beef and that beef is exported to the EU. Pork, poultry and eggs with embedded soy are excluded from EUDR obligations.
While compound feed is not under the scope of the regulation, feed manufacturers involved in reselling soybean meal directly to farmers are impacted, feed producers in Northwestern Europe, in particular. These companies must provide a simplified due diligence statement (DDS light) to the competent authorities in their country.
Potential economic impact of the EUDR on the feed chain and livestock sectors
FEFAC recently released its analysis of the potential economic impact of the EUDR on the feed chain and livestock sectors, focusing on soybean meal availability for 2025. Suppliers of EUDR-compliant soy have submitted few offers for Q1 2025 deliveries, a concerning sign for the industry.
Procurement costs for EUDR compliant soy products are expected to rise by 5-10%, largely due to logistical costs and regulatory uncertainty, with the total cost impact, including direct and indirect costs for other alternative protein sources, potentially reaching €2.25 bn in 2025.
The EU consumes around 30 million tons of soybeans annually, but there is no guarantee that sufficient EUDR-compliant products will be available to meet this demand in 2025. There’s market availability, but it is limited, and the grey zone of what qualifies as EUDR-compliant increases market uncertainty. FEFAC’s impact report outlined that while suppliers are making efforts to comply, the current projections suggest a gap between the demand and the supply of compliant soy.
Ukraine, Serbia, West Africa, India, and China are identified as medium to high-risk regions for potential disruption, while North America and South America present lower to medium risks, based on FEFAC’s initial supply chain disruption risk assessment and the JRC-managed forest degradation deforestation observatory map, noted FEFAC.
In addition, the global EU market share for soy usage is less than 15% and falling, meaning soy exporters have sufficient market alternatives, in case they may lose market access to the EU, stressed the trade group.
Commenting on the trade associations being forced to release their own guidance to keep the process moving, Mighty Earth’s senior policy director, Julian Oram, said there is only so much industry bodies can do without clarity from the Commission on how they can prove compliance.
“It’s baffling that with less than 100 days to go until the EUDR comes into force, the EU Commission is dragging its heels and sitting on crucial compliance guidance, creating an information vacuum for companies and countries that want to crack on with their preparedness.
“In a climate and nature emergency, of which deforestation is a key driver, the need for decisive political action to implement EU laws designed to protect forests is of paramount importance for the planet.”
