According to the EC calculations, approximately 10 million hectares are deforested annually around the world. Very often irreversibly.
– It's as if all the forests in Poland and another part in Slovakia were cut down in a year – Przemysław Tronina from the US Soybean Export Council (USSEC) illustrated the situation to participants of the July Gdańsk Grain Exchange.
Therefore, the EC looked into this problem and proposed a solution to limit this phenomenon, i.e. the EUDR (European Union Deforestation Regulation).
It entered into force on June 29, 2023. It regulates the introduction to the EU market (including, of course, Poland) and export from the EU (including Poland) of certain goods and products whose production may or is related to deforestation and forest degradation (also in EU!). This means, for example, soybean, soybean meal and palm oil, but not only.
EUDR was also one of the most prominent topics in almost all speeches, an important topic of this year's Gdańsk Grain Exchange. Why? Because companies that trade soybeans still do not have a clear situation regarding the regulations that will apply to them in practice from January 1, 2025.
– Meanwhile, a wide range of new obligations and administrative burdens gives room for making significant mistakes, and these are subject to penalties of up to 4% of the annual turnover – warned representatives of the grain industry during the July meeting in Sopot, Przemysław Tronina.
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Who does the regulations apply to?
Specifically, the EUDR prohibits the introduction into the EU of raw materials whose primary goods originate from areas subject to deforestation after December 31, 2020. That is, everything that comes from distant countries, but also from the EU (!) from areas deforested after the above-mentioned. time cannot be placed on the market in the EU. These are seven basic goods (so-called reference goods), i.e. soybean, cattle, oil palm, cocoa, coffee, rubber and their derivatives, e.g. soybean meal.
The regulation divides companies into two types that operate on the market in terms of the above-mentioned: products (referenced goods and their derivatives): those who place them on the market for the first time (importers) and traders (companies that use the mentioned goods for their own needs, such as feed factories, are also "included" here). The latter are subject to slightly lower requirements.
– If sustainable soybean meal flows to us from the USA, the importer is the first entity in the EU to introduce this product. The distributor of this product is already a commercial entity. But when soybean comes to us from Ukraine, the importer is also the first entity, but in addition, in this case, the distributor is also considered the first entity because he introduces soybean meal, i.e. a derivative product, to the market for the first time. A feed factory is already a commercial entity in this respect, explained the USSEC expert.
Who will be the authority supervising the EUDR regulation in Poland?
Well, we don't know. As Tronina informed, so far a total of 8 EU countries have not yet designated such a body, including Poland.
Apart from a penalty of at least 4% of annual turnover, what is the penalty for failing to comply with the regulation? For example, the need to withdraw regulated goods from the market and their disposal. And a complete ban on trade.
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As the USSEC expert pointed out, EUDR regulations are one thing, but life shows that information about whether a given product has contributed to the degradation of the natural environment (deforestation) is increasingly requested by e.g. retail chains and restaurant chains. This must also be taken into account.
What obligations does EUDR introduce?
First of all, it will be necessary to implement a "due diligence system" in the company, which will answer the question whether the company has properly checked where the product comes from (where it was grown). Data from this system (in the form of a due diligence declaration) will then be collected in the EU electronic system. In addition to basic data describing the product, such as country of origin, batch numbers, etc., there will be geolocations of all plots where the above-mentioned goods were manufactured.
– If a ship of soybean meal is coming to us, for the soybean from which the meal was produced we must receive – if we are an importer placing on the market for the first time – a list of the location of all plots on which soybean for this meal was produced in order to enter it into the EU IT system and then forward it to commercial entities. These entities also have to verify whether these plots were subject to deforestation or not – explained Przemysław Tronina.
You will also need to conduct a risk assessment for products (there are several ways to assess whether a given product may come from deforested areas or not) and… boast about meeting the requirements of the EUDR regulation on the "internet". The regulations in question require the publication of such declarations.
And all this should work from January 1, 2025.
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What can you do to prepare as a company?
– Today, first of all, we need to determine whether the regulation applies to us, i.e. check the products. Implement a due diligence system and learn how to use online plot mapping tools to check whether given plots have been subject to deforestation, Tronina said.
Just another ordinary day for an entrepreneur in the agricultural industry….
And if it all doesn't seem that simple, you can use the services of the so-called an authorized representative – which is also allowed by the EUDR regulation, i.e. someone who, on behalf of a given company, will enter all data into the system and check the location of the plots.
– So, I wish you good luck – concluded the USSEC expert.
Farmer.pl editorial team too.
