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EUDR FAQ and Potential Extension: What you need to know!
EUDR FAQ and Potential Extension: What you need to know!
From a potential potential 12-month delay, to the release of the long-awaited EUDR FAQ document has it has been an eventful week for the EUDR Team!
This week the EU press team announced that a proposed delay will be voted on. Importantly the date for these votes has yet to be confirmed and so there is still uncertainty on if a delay will be confirmed in time. However, it seems the EU is leaning toward allowing additional time for both the industry and competent authorities to better prepare for enforcement, rather than opting for a sanction-free grace period. It’s still not a lot of time, and complex supply chains will need to use the time to improve due diligence.
On 3rd of October, the EU released it’s latest FAQ document – Here are our key takeaways from the FAQ:
1. Deforestation Occurring Within the Farm but Not on the Plot Producing Forest-Risk Commodities
This scenario is discussed in Question 1.15 of the EUDR FAQ, accompanied by a diagram and explanation:
If deforestation occurs within the productive area of a farm (the plot), it is non-compliant.
If deforestation happens in within the property, but not within the productive area, the plot remains compliant.
However, if both areas produce the commodity, the operator must prevent any risk of mixing compliant and non-compliant produce.
Within Sustainimaps where a deforestation alert has occurred outside of the productive area, this can be reclassified to no-forest loss. You can add notes and photos to support this. If you provide a polygon, productive zones can be monitored separately from the farm polygon.
2. No Exceptions for Countries Prohibiting Geolocation Data Sharing
Question 1.31 addresses countries like China, which restrict the sharing of geolocation data. The European Commission clarifies that: “Operators and traders must submit geolocation information as part of their obligations. Otherwise, they cannot comply with the due diligence requirements outlined in Article 8.”
Businesses cannot place goods on the EU market without geolocation data.
3. Downstream SME operators don’t need to repeat DDS.
In Question 3.5, the EC confirms that downstream SMEs do not need to repeat Due Diligence (DD) on products that have already undergone the DD process. Companies must declare and submit any parts of the supply chain not covered by due diligence through the Information System (IS).
Additionally, SMEs must disclose the upstream DD reference numbers if required by the competent authorities.
4. Annex II is the Due Diligence Statement template for all commodities.
According to Question 5.15, Annex II serves as the template for the Due Diligence Statement for all commodities and operators.
In Sustainimaps, this this template forms the basis of our new comprehensive DDS report, which is due to go live at the end of October.
Our report includes more detailed risk assessments, covering factors like indigenous peoples’ rights and corruption indices. As with all of our data, we rely on open-source, reputable, verifiable, and auditable providers.
5. There is no guidance on acceptable resolution for satellite services.
In Question 5.18, the EC confirms that there will be no further guidance on acceptable satellite services for EUDR compliance. In fact, satellite analysis is not a requirement, though it can greatly assist in compliance efforts.
EUDR has driven a huge surge in the use of satellite imagery and analysis in an industry that isn’t as familiar, and so there are many misconceptions about what is suitable for EUDR. Our data sources range from 10 to 30 meters in resolution – which is typical for agriculture and forestry monitoring. Some providers stress the need for high-resolution data, but the key lies in the quality of the machine learning algorithms that process satellite imagery. The EU preamble emphasises that insights must be “measurable based on quantitative, objective, and internationally recognized data.” All data used by Sustainimaps meets these criteria. Additionally, we pride ourselves on transparency and auditability, so our sources and methodology is available to you our user to share with stakeholders.
6. Limited Use of Declaration in Excess
Question 1.18 explains that ‘Declaration in Excess’ applies only to specific circumstances, such as bulk commodities stored in silos or during milling. Each plot must still have its own due diligence declaration.
Declarations at the country or regional level are not acceptable due to enforcement and monitoring challenges.
The release of this FAQ document, along with the recent EU announcement of a potential 12-month extension, shows that the EU has considered the logistics of EUDR enforcement by 31 December 2024. It now seems unlikely that there will be a sanction-free grace period, instead they are proposing additional preparation time. This extension means the EU will require full due diligence to be demonstrated in a timely manner. Drawing on our experience with complex supply chains, our advice is use this time to strengthen your due diligence efforts.
We’re ready to assist with comprehensive solutions to meet these requirements effectively – whether or not the EU moves forward with a 12 month delay, we’ll continue to develop our solutions to support your EUDR compliance. If you have any questions or concerns reach out to the team at hello@tradeinspace.com