Navigating EUDR Landscape: How Real-Time Data Enables Compliance & Growth

What is EUDR?

The European Union Deforestation Regulation (EUDR) is a groundbreaking legislation aimed at deterring deforestation associated with agricultural commodities. This approach demands a seismic shift in how we source, grow, and trade food. While it aims to ensure deforestation-free supply chains, EUDR also promotes sustainability and allows us to save our planet. Agri-companies catering to the EU are at a crossroads: adapt and thrive or struggle in the wake of new regulations. Implementing digital technology in agriculture will emerge as a game changer to ease compliance.

Requirements in EUDR compliance

EUDR aims to regulate companies placing certain products on the EU market to combat forest degradation and deforestation. It mandates operators and traders to ensure deforestation-free sourcing, applicable to specified commodities and derived products. Non-compliance with EUDR can result in penalties of up to 4% of annual turnover and potential market exclusion for non-compliant companies.

The EUDR mandates rigorous due diligence, robust traceability, and unyielding transparency. Technologies like remote sensing, satellite monitoring, and AI-powered risk assessment tools will be the frontrunners in this area. They can identify deforestation hotspots and pinpoint deforestation in real-time. Moreover, EUDR compliance resonates with the growing consumer demand for transparency and ethical and sustainable practices.

EUDR Timeline & EUDR Commodities

EUDR compliance, effective December 2024, covers palm oil, rubber, soy, timber, cattle, cacao, and coffee. Businesses exporting these products and their derivatives to the EU must furnish proof that they were not sourced from land deforested since 2020.

Challenges with EUDR compliance

According to Forest Trends think tank, Mongabay, smallholders account for 95% each of Vietnam’s coffee and Thailand’s rubber, while they produce 42% of Indonesia’s palm oil. This clearly shows the significance of smallholder farmers in the supply chains.

Considering the inherent limitations of working with smallholder farmers, these are some key challenges:

• Smallholder farmers pose inherent limitations for traceability and compliance monitoring in supply chains, particularly concerning exports.
• Challenges include technical expertise and resource constraints hindering them from providing comprehensive evidence regarding their land use practices.
• Agri-businesses sourcing from these smallholder farmers must overcome these hurdles to be EUDR compliant.

The EUDR compliance covers risk assessment, traceability, mapping, risk mitigation strategies, supplier engagement, and comprehensive compliance reporting. Leveraging digitization eases the compliance journey for EUDR and offers a range of benefits for agri-businesses navigating this regulatory landscape.

Advantages of Traceability and Monitoring for EUDR Compliance

Real-Time Monitoring: Advanced satellite technologies combined with AI/ML models enable companies to use real-time and historical data to monitor land use activities continuously. It enables companies to pinpoint hotspots within supply chains, ensure deforestation-free sourcing, and implement risk mitigation strategies.

Streamlined Documentation and Record Keeping: Digital solutions can automate data collection and management. It does away with cumbersome paper trails, plugs data loss, and drives the accuracy and accessibility of critical compliance documentation. Such a streamlined process eases compliance.

Enhanced Geolocation Accuracy: Digital tools utilize advanced technologies like remote sensing and satellite imagery to precisely geolocate commodities sourced, ensuring traceability and verifying deforestation-free status.

Integration with Existing Systems: Seamless integration of digital compliance solutions with existing tools enterprises use ensures operational efficiency and minimizes disruption to current workflows. Given the complexity of supply chains, which involve multiple stakeholders, each with their digital solutions, integrating these tools becomes crucial.

Robust Data Security: Cutting-edge technologies employed by digital solutions guarantee the security and integrity of collected data, safeguarding sensitive information. Compliances like the EUDR mandate adherence to data security standards.

Automated Auditing: Digital platforms can automate key compliance tasks, including auditing and verification. It reduces administrative burdens and streamlines compliance procedures.

Efficient Information Exchange: Secure digital platforms facilitate seamless information sharing between all stakeholders within the supply chain. It promotes transparency and collaboration across the value chain.

Chain of Custody: Digital platforms establish a secure and transparent chain of custody for commodities. It guarantees the integrity and deforestation-free status of products.

By implementing digital solutions, companies can turn EUDR compliance into a catalyst for positive change. These tools empower businesses to confidently navigate the regulatory landscape and contribute to a future where deforestation is history and sustainable practices thrive.

Opportunities EUDR Compliance Presents:

Digital traceability: Track & Prove EUDR Compliance with Ease

The EU Deforestation Regulation (EUDR) demands robust traceability systems, presenting a hurdle for many companies. Digital traceability solutions have the potential to ease this journey by tracking the entire supply chain.

Digitization right from the farm level helps validate claims. Sensors and satellites automate information capture with timestamps for verification, providing 360-degree traceability. It offers real-time visibility into your supply chain. Further, reporting becomes seamless with pre-filled, accurate data from the platform.

Real-Time Monitoring: Seeing is Believing for EUDR Compliance

EUDR demands concrete evidence of deforestation-free practices. Imagine having eyes in the sky constantly monitoring every corner of your supply chain. Real-time monitoring through advanced technologies like satellite imagery and remote sensing makes this a reality.

It helps detect unauthorized land-use changes immediately, enabling swift intervention and proactive risk mitigation. Geospatial data and satellite imagery help validate deforestation-free practices, boosting trust and market access. Businesses can use real-time insights to identify high-risk areas, target resource use effectively, and make data-driven decisions for sustainable sourcing.

Digital traceability and real-time monitoring can transform EUDR compliance into a strategic advantage.

Cropin provides a suite of solutions that offer a unified and holistic view of the agricultural supply chain, enabling compliance with EUDR. This integrated open ecosystem platform is an essential building block that leverages state-of-the-art technology, including satellite imaging, artificial intelligence, and geolocation data.

Using the Cropin Cloud platform, organizations can monitor their supply chain and gain a transparent, traceable, and measurable unified view across their food supply chains. In addition to some basic compliance requirements, Cropin offers advanced features like classifying deforestation, acreage overlap analysis, and year identification for a comprehensive view of regional deforestation trends.

Real-Time Monitoring & Tracking for Deforestation-Free Products with Cropin

Deforestation Analysis for Sustainable Sourcing: Deforestation, primarily in the first mile, is a huge challenge to EUDR compliance. Cropin addresses this concern with regional and plot-level analysis. Regional insights, including crop identification, acreage, and yield estimates, are complemented by historical deforestation analysis using land-use land-cover (LULC) maps. At the plot level, Cropin helps identify deforestation risks for data-driven, informed sourcing decisions, enabling EUDR compliance. It empowers organizations to predict and prevent deforestation, protecting ecosystems and livelihoods.

Real-Time Monitoring with BI Reports: EUDR compliance demands real-time monitoring with validation. Using Cropin's platform, enterprises can plan, track, and collect evidence at farm levels. Embedded BI reports and visualizations enable tracking of the first mile. Real-time insights promote efficient and effective operational management.

In-Depth Plot Level Intelligence: Informed sourcing requires in-depth knowledge of cultivation methods, ground cover, and deforestation at the plot level. Cropin provides insights on tillage, cover crops, crop health, and deforestation, empowering organizations to make informed sourcing decisions. This plot-level intelligence is crucial for validating EUDR compliance and identifying deforestation risks in the first mile.

Compliance Reporting and Validation Models – dMRV: One of the unique features of the Cropin Cloud platform is its ability to shed light on the critical stage of the supply chain – its very origin – the farms. Cropin helps you achieve this by geo-tagging plots that provide comprehensive information about the package of practices implemented, inputs applied, and harvest operations. One of the key advantages of the Cropin platform is the flexibility it offers in configuring tasks and data capture, collecting ground truth data, and validating it through satellite imagery. Cropin has developed and established validation models that utilize satellite imagery analysis.

Field management practices for stakeholders in the supply chain can be codified using the no-code enterprise solution for the configuration of data structures. This facilitates digitalization and Monitoring, Reporting, and Verification (MRV).

Deforestation Status Categorization: Cropin solution distinguishes deforestation-free plots and ones affected. It provides near-real time reporting to enable timely action. This helps businesses identify areas requiring attention and mitigate risks with due diligence processes.

Acreage overlap analysis: Cropin's acreage overlap analysis feature goes beyond the mere categorization of deforestation. It provides valuable insights into the extent of deforestation. Through precise overlap calculation, the platform determines the percentage of acreage within a plot that overlaps with deforested land.

Deforestation plot level -

This calculation provides transparent information regarding the extent of deforestation impacting operations or areas of interest. By thus quantifying overlap, users can better understand the impact of deforestation on their land or supply chain and make informed sourcing decisions. This feature is invaluable for EUDR compliance.

Identification of year of deforestation: Cropin's year identification feature enhances compliance efforts by incorporating temporal analysis into its platform. Using temporal deforestation analysis, users can pinpoint the specific year of deforestation with remarkable precision down to a 10x10 meter resolution. This capability provides proof points for EUDR reporting requirements by providing crucial historical context to deforestation. By accurately identifying the timing of deforestation events, stakeholders gain a deeper understanding of land use changes over time, enabling them to track trends. They can implement targeted interventions and assess the progress of their projects to address deforestation challenges.

Data security, ease of deployment & scalability: Following IT security protocols, communications on the Cropin platform are secured via HTTPS (TLS1.2/1.3). Regular vulnerability and penetration testing and incidence response procedures are conducted to manage threats and vulnerabilities. To ensure security, data is encrypted in transit and at rest. Further, automated backup policy and firewall protection are also enabled.

Cropin emerges as a strategic choice to manage the trustworthy data associated with EUDR compliance procedures and guarantees accountability and transparency throughout your supply chain.

Cropin Cloud's success speaks volumes: digitizing 30 million acres, impacting 7 million+ farmers across 103 countries. It empowers over 200 million acres of predictive intelligence globally, backed by a robust knowledge graph of 500 crops and 10,000 varieties. This track record demonstrates seamless deployment across diverse geographies and effortless scalability.

In conclusion, navigating the EUDR with tech-powered solutions is not just a compliance chore; it's a launchpad for a future where sustainability and profitability go hand-in-hand. By embracing the challenges and harnessing the opportunities, agri-businesses can travel a greener path and ensure food security for the future.