EUDR compliance: FoodChain ID identifies risk mitigation measures with anti-deforestation assessments

27 May 2024 --- As the European Union approaches the implementation of the Deforestation Regulation (EUDR), it’s becoming increasingly crucial for companies to comply with its requirements.

Effective December 30, 2024, under the EUDR, businesses must implement a due diligence procedure and present data on the origin of the products to confirm that no deforestation occurred since 2021.

FoodChainID, which provides integrated food safety, quality and sustainability services to the global agrifoods industry, unveils a new set of EUDR services in light of the looming deadline.

While the law has been gaining favor among some, with F&B giants like Nestlé and chocolate and cocoa producer Barry Callebaut expressing support, key industry players have highlighted issues regarding transparency and scope. 

Moreover, recent compliance practices, presented in critical findings from a report published by the Accountability Framework Initiative (AFi) and Carbon Disclosure Project (CDP), suggest that 64 out of 1,152 companies managed to eliminate deforestation from at least one supply chain between April and September 2023.

Food Ingredients First sits down with Conor Kearney, CEO of FoodChainID, to discuss the organization’s newly launched deforestation services and the challenges it can help businesses confront in the process.

Deforestation-free services
FoodChainID worked with ReSeed and Dengo Chocolate to create a deforestation-free cocoa supply chain. With its new due diligence services, the firm aims to “serve as an independent verifier of deforestation-free claims for the commodities in the scope of the law.” 

These solutions respond to a growing demand from retailers and consumers to source food commodities from supply chains that do not cause environmental harm.

With a background in providing certification and verification services for internationally recognized sustainability standards such as organic, ProTerra and Bonsucro, the firm offers regulatory databases to companies to examine requirements across regions and countries.

Conor Kearney, CEO of FoodChainID.Challenges in compliance
One significant challenge confronting the compliance process is for companies to trace the origin of their products and prove that they have not violated any local laws and regulations. The EUDR mandates producers and traders to provide precise geographical coordinates for all plots of land from which their products originate.

“In general, this information can be a challenge because brands do not always know the exact location of the farms that supply their raw materials,” reveals Kearney. To circumvent the challenges in gathering geolocation data, FoodChain ID collects all pertinent data from suppliers, including, where feasible, the farm plot level. 

“We conduct a risk assessment for each supplier and help identify necessary risk mitigation measures in cases where there is more than a negligible risk of non-compliance. The information gathering includes document review and geolocation acquisition. The risk assessment for potential deforestation includes application of remote sensing technology, even in high-risk areas.”

However, small-scale farmers, who are estimated to be responsible for 75% of the global food supply, may need more technical capacity and financial capital to meet the due diligence requirements of the new rule.

In addressing the effectiveness of their services in the Global South, Kearney states that the company is already working in Brazil, where combining multiple audits to reduce costs is their strategy to increase efficiency. Moreover, in certain parts, assessments combine technology with on-ground verification instead of relying solely on the latter.

According to AFi and CDP’s findings, several companies reporting on DCF progress rely on inadequate certification systems, which do not have strict no-deforestation and no-conversion criteria or account for chain-of-custody models. 

FoodChain ID acknowledges that some systems may not adequately cover the required criteria under the legislation. Therefore, the certification body is combining audits with EUDR verification.

Deforestation beyond EUDR
While major industry players perceive the EUDR as the first step for companies serious about eliminating deforestation from their supply chains, efforts must extend beyond just compliance. Enabling local farming communities, which might risk being shut out of EU supply chains, needs to be prioritized.

In Southeast Asia, for example, small-holder farmers are responsible for 95% of Vietnam’s coffee, 42% of Indonesia’s palm oil, and 95% of Thailand’s rubber, according to MongaBay.

“We work with carbon credit platforms such as ReSeed.farm that empower farmers to invest in more efficient farming practices, especially regenerative agriculture,” Kearney explains. “If farmers have the opportunity to invest in regenerative practices, the evidence shows that they will support the prevention of deforestation and reforestation.”

By Anvisha Manral