EUDR Background
Updated on 15 May, 2024
What is EUDR and what does it cover?
EUDR stands for the EU Deforestation Regulation. This legislation was adopted in 2023 and aims at diminishing the EU’s contribution to global deforestation by ensuring that products consumed are deforestation-free. In short, EUDR prohibits companies from putting products on the EU market if they are a) the result of deforestation and/or b) not produced in line with the laws of the production countries.
Which commodities and/or products are covered by EUDR?
The following commodities are in scope of EUDR: palm oil, cattle, wood, cocoa, soy, coffee, rubber and some of their derived products, such as leather, chocolate, tyres, or furniture. However, not all products containing these ingredients are in scope. Only the products mentioned in Annex I to the regulation fall under the scope of EUDR on the European market. For instance, soap or shampoo ‘that may contain palm oil derived products’, does not fall under the EUDR obligations since these products are not mentioned in Annex 1.
When did it pass and when will it apply?
The European Union Regulation on deforestation-free products entered into force on 29 June 2023. Companies are required to comply with due diligence obligations, and National Competent Authorities (NCA) will start carrying out checks on 30 December 2024 (30 June 2025 for micro and small enterprises).
Who will enforce the EUDR?
The checks will not be done at the EU level but at the level of Member States. Each EU Member State will designate an agency or ministry as a National Competent Authority (NCA) in charge of enforcing the EUDR and monitoring compliance. The list of NCAs can be consulted here.
What type of requirements should economic operators prepare for?
Due diligence requirements
Operators shall establish and keep a framework of procedures and measures up to date to ensure that the relevant products they place on the market or export comply with the Regulation. The precise information that should be part of the Due Diligence process can be found in Article 9 of the Regulation.
Risk assessment process
Prior to putting the products of Annex I on the market, all operators and traders must do a risk assessment to assure against a non-negligible risk of the product being non-complaint.To that end, they shall collect information, documents and data which demonstrate that the relevant products comply with the Regulation.
The Regulation explicitly mentions voluntary schemes such as RSPO as tools that companies can use in the risk assessment process (Article 10.2).
What happens if products are not compliant with the EUDR?
If a Member State National Competent Authority comes across goods that are non-compliant they can:
- prevent the relevant product from being placed or made available on the market or exported;
- withdraw or recall the relevant product immediately;
- donate the relevant product to charitable or public interest purposes
In addition to these, the operator/trader can be fined. These fines can be 4% of the turnover of the company in the Member State concerned.
Where can I find the latest EUDR legal text?
The EUDR legal text can be found in the EU Commission official website here. The text is available in 24 languages.
RSPO and EUDR
What is the position of the RSPO on EUDR?
The RSPO is a global partnership to make palm oil sustainable. The work of the RSPO and the EUDR are complementary and share the mission of preventing deforestation. This is why the RSPO has supported the idea behind the EUDR from its inception. Simultaneously, the RSPO recognises possible negative side effects of the regulation such as the possible exclusion of independent smallholder farmers from the European supply chain and the emergence of parallel supply chains (a “deforestation free” supply to Europe and an unchecked supply chain to other large consuming regions).
Will the RSPO remain relevant after EUDR?
Yes. Even more so! RSPO is the leading global organisation on sustainable palm oil. Importantly, RSPO Certification presents a holistic approach to sustainability. Beyond legality and ensuring no deforestation, the RSPO Standards promote smallholder inclusion, gender policies, pesticides and water management, as well as many other social and environmental topics that are not part of the EUDR.
With RSPO Certification, RSPO Members:
- are better prepared and equipped to deal with the EUDR as they already have relevant processes in place;
- could be subject to fewer checks by EU Member States’ National Competent Authorities as they have indicated that they might consider reputable certifications like RSPO as a risk mitigation tool in deciding where to allocate their scarce resources. Article 10.2.j of the EUDR explicitly recognises third-party verified schemes as tools which can be used by companies in their risk assessment, which will be an important element for our members to demonstrate compliance with that part of the regulation.
- are able to show that they go beyond the EUDR legal minimum requirements (no deforestation and legality), thus instilling trust among their stakeholders.
Is RSPO Certified material by definition automatically EUDR compliant?
No. While the regulation clearly states that in order to recognise good practice, certification or other third-party verified schemes can be used in the risk assessment procedure, certification does not substitute the operator’s responsibility regarding due diligence. This means companies cannot rely only on certification by itself to demonstrate compliance. There are also certain differences between the RSPO Standards and the EUDR, which mean that companies will need to provide additional information (compared to the RSPO Standards) in order to demonstrate compliance.
What are the main distinctions between the EUDR and the 2018 RSPO P&C?
Definition of forest
One of the main differences between EUDR and the 2018 RSPO Principles and Criteria (P&C) is the definition of forest. The EUDR uses the FAO definition, which is a numerical definition stating that anything that is +0.5 ha, higher than 5 metres and +10% foliage cover constitutes a forest. RSPO uses a more qualitative approach using the HCS-HCV methodology, looking at biodiversity levels, rare or endangered/threatened species in the area, ecosystem services provided, carbon storage capacity, cultural relevance of the land, and more. This means that it is possible for an area to be designated as forest under EUDR while the 2018 RSPO P&C allows development, or potentially an area can be designated as requiring protection under the P&C 2018, but not considered of high value by the EUDR.
Cut-off date
The RSPO cutoff date precedes the EUDR cut-off date (31 December 2020) while the RSPO cut off date protects primary forests from November 2005 and from November 2018 for secondary forests ( 2018 RSPO P&C).
Does the 2018 RSPO P&C cover the legality criteria?
As the RSPO requirements on legality are largely in line with EUDR requirements, the RSPO is in a good position to facilitate information on legality. The 2018 RSPO P&C covers seven of the nine EUDR legality requirements and the two which are not explicitly mentioned in the Standard (taxes and anti-corruption) are covered under the general obligation for units of certification to abide by the laws of the producing country.
What level of geolocation/traceability is required for the EUDR, and how does RSPO Certification support this?
RSPO aims to support its members in providing information on the EUDR geolocation requirements. ‘Geolocation’ means the geographical location of a plot of land described by means of latitude and longitude coordinates corresponding to at least one latitude and one longitude point and using at least six decimal digits. For plots of land of more than four hectares used for the production of the relevant commodities other than cattle, this shall be provided using polygons with sufficient latitude and longitude points to describe the perimeter of each plot of land. The 2018 RSPO P&C requires geo-location information to be available for all Fresh Fruit Bunches (FFB) (certified and non-certified). However, the 2018 RSPO P&C does not require polygons of 6 digit geolocation data. This is addressed through the creation of the RSPO’s certification, traceability and trade system, prisma, which will allow producers (on a voluntary basis) to add the EUDR compliant information to the traceability system so that compliance can be demonstrated (see more information below).
If I am sourcing RSPO Segregated (SG) or Identity Preserved (IP), does that mean I will be compliant with the EUDR?
Both IP and SG will help companies to show compliance with EUDR since all the prerequisites are in place to provide the necessary EUDR information. prisma will help members extract all the relevant information. However, neither IP or SG is a formal assurance of EUDR compliance. That responsibility remains with the operator/trader and there are still differences in definition, meaning companies must ensure that their supplier has submitted all extra EUDR compliant information into the prisma system.
The EUDR FAQ mentions that Mass Balance (MB) is not accepted, so does this mean that RSPO MB will never be compliant?
The European Commission defines MB as the “mixing of EUDR compliant with non-EUDR compliant material”, which is not allowed. RSPO MB as used in the sector has a different definition, “the mixing of certified with non-certified material”. This is not in breach of EUDR. Companies will need to demonstrate that the non-certified part of the MB is legally produced and deforestation-free.
How about Credits?
EUDR does not prohibit the buying or sale of credits, which means that this is still possible for European companies to use credits as part of their responsible sourcing policies and to support smallholders. However, companies must ensure that their physical supply is EUDR compliant.
prisma and RSPO tools/resources for compliance
How can RSPO tools and resources help compliance with the EUDR?
RSPO is in a good position to facilitate compliance with EUDR. The Regulation itself recognises third party verified schemes as tools which can be used by companies in their risk assessment, without substituting the operators’ legal responsibility with regards to due diligence.
prisma, which stands for “Palm Resource Information and Sustainability Management”, is a tool developed by the RSPO aimed at providing a dynamic and responsive framework to adapt to the evolving global sustainability landscape.
It allows members to upload and trace relevant EUDR compliant information throughout the supply chain.
How will prisma identify the deforestation status of products?
prisma provides a dynamic framework designed to track and manage essential sustainability data across the palm oil supply chain. By leveraging the RSPO Certification process, prisma integrates important data points such as supply base disclosures, land use change analysis, and audit results. This integration helps in identifying the boundaries of oil palm plantations and the years when land was initially converted, which are crucial for monitoring any new land clearing activities that might be considered deforestation.
Moreover, prisma’s Trade and Traceability module ensures that as RSPO Certified palm oil moves from the plantations (upstream) through the mills and further down to the end consumer (downstream), all the sustainability information, including deforestation status, is maintained accurately and transparently. This allows members and stakeholders to verify that the palm oil products they are using or selling comply with strict environmental standards, aiming to minimise deforestation and enhance sustainability efforts.
Will prisma be required for RSPO Members to use?
Similar to its predecessor PalmTrace, prisma will require all supply chain actors dealing with RSPO Certified products to use the platform. According to current RSPO Standards, these actors must register with the RSPO IT platform to obtain their RSPO Certification licence and/or to engage in the sale or purchase of Credits. As prisma is set to replace PalmTrace, it will become the essential tool for compliance and certification management.
How can RSPO Members train their suppliers and stakeholders to utilise prisma? Will the RSPO provide training materials and resources for this?
RSPO is dedicated to supporting its members with onboarding and training resources. Comprehensive prisma manuals, guidance documents, and tutorial videos will be developed to aid this process. Additionally, onboarding and training sessions will be organised before the platform’s launch and will continue thereafter to ensure seamless adoption.
When will prisma be available to members?
prisma is expected to be accessible to members in Q4 2024.
Will there be a cost to use prisma?
Similar to PalmTrace, there will be no additional costs beyond the standard administration fee. Further information is available here.
Will prisma cover non-certified volumes as well, including geolocation data for non-certified volumes?
prisma will initially focus on enhancing traceability for RSPO Certified products, with plans to include non-certified volumes (in MB supply) in subsequent phases. This phased approach ensures that we prioritise establishing a robust system for certified products before extending the capabilities to non-certified volumes. We will actively engage with our members post-launch to explore and determine the most effective ways for prisma to support in managing data for non-certified volumes.
