In our last post we gave you an overview on the focus of the EUDR. By now you know, it will force companies to have a clear traceability of the wood. As well as, other commodities being imported and exported from the EU. Its purpose is having a clear supply chain and ensuring that the goods are not a result of deforestation and forest degradation occurred after December 2020. To achieve this, most businesses will need new tools that facilitate information and allows them to continue with their usual daily processes.
The EUDR was set in action in June 2023. Is set to start applying the new obligations from the 30th of December 2024. As a result, every import, export and placing of wood in the EU must be in accordance to the EUDR. Companies must be certain about the processes their suppliers followed before acquiring products from them. It will be a way of making business inside and outside of the EU, follow relevant legislations to continue to do business.
One could think because of the name, that EUDR will only force EU companies (producers, importers and exporters) to follow the requirements. Nevertheless, it will also involve international supply chains indirectly.
Whereas there is no ban on a commodity or a country, companies in the EU will only be allowed to export products in this territory if the exporter of the commodity proves it fulfils the following:
This implies that products containing or made out of wood, must have been harvested without inducing forest degradation and deforestation. Deforestation means the conversion of forest to agricultural use, whether human-induced or not. Unlike prior EU legislations concerning illegal logging and associated trade such as the EUTR. It focuses also on timber harvesting that should comply with the legal framework of the producing country.
With the EUDR, a company looking to introduce pertinent products into the EU market will be required to commence by submitting a due diligence statement to the Information System. Besides the Operator, the European Commission, and respective national competent and customs authorities will have access to it. This sophisticated Information System will perform an automated Risk Analysis in the background and record the result, which will be visible to Competent Authorities and Customs.
In addition to deforestation, other terms will be considered. Such as land use rights, forest management and biodiversity conservation, third party rights, labor rights, and that human rights are protected under international law, among others.
This submission should be made via a specialised information system, which will be established by the European Commission. Information System will be based on the existing TRACES NT system. By doing this, companies assume responsibility on the compliance of the products according with the EUDR requirements.
The Due Diligence Statement aims to have a clear track of the commodities supply chain by collecting different data. To do so, it will comprehend detailed information that proofs the products follow the stipulations.
Furthermore, although there will be no specific ban on countries, there will be risk-based controls. The European Commission will classify countries as low-, standard- or high- risk. Where depending on the classification the due diligence will be simplified or not. For this, a risk assessment in relation to each product will be performed. This will determine how likely it is that it does not follow the standards of the EUDR.
Information about due diligence assessments will be available to government authorities, traders in the business, and, to a lesser extent, the public. Companies that sell products related to these commodities must also share certain details. Such as reference numbers of due diligence statements. As well as, all the evidence showing that they’ve done proper checks to ensure there’s very little risk associated with their products. They should pass this information down the supply chain to demonstrate that they’ve done it properly.
We are aware businesses will face many challenges with presenting the data to comply with the due diligence. To help with this matter TIMBERplus, is working on a solution to allow the user to gather the needed requirements. Currently we are upgrading tools to help users with the traceability of products. From the origin of the wood log to the sale of the veneer. With our well-known software TIMBERplus Log Purchase it’s currently possible to collect single geolocation position of each timber log and to enable traceability through the whole production process even to the single veneer bundle. The new upgrade of TIMBERplus Log Purchase will enable our customers to draw a polygon in the map on the mobile device in the middle of the forest, for the surface area larger than 4ha. Providing geolocation positions for wood products is one of the most important tasks in new EUDR legislation.
Now, we are developing software focused on helping our customers achieve other EUDR requirements. This new development, part of our TIMBERplus software family will make EUDR easier to deal with. It allow the user collect the data for the DDS and through our software upload it into EU Information System. As a result of successful upload, the customer will receive a reference number for it. When a sale is created this reference number will be transferred further through the whole sales chain.