At a Glance

#1 What we are expecting from the European Union

#2 EU Observatory maps have challenges

#3 EUDR Compliant Rubber is going for a premium

#4 AHEC Geolocation database underway

#5 ‘The Tire Cologne’ conference - EUDR a common presence

#6 India Legality Study

#Bonus We are now an EU Operator! (in Test)

#1 What we are expecting from the EU

A representative from the European Commission on a recent webinar has stated that the above items are the key focus areas for them as we get closer to the EU compliance deadline on 30th December 2024. We eagerly anticipate all the items, especially the additional clarifications on operational matters and the latest guidance documents to support businesses as they transition for EUDR compliance.

No timelines have been mentioned, but the expectation is this will be available in the next few months.

#2 EU Observatory maps have challenges

The EU Observatory has provided Global Forest Cover maps for the EUDR cut-off date of December 2020, as a tool to assess the risk of deforestation occurring in areas of production.

While incorporating this data into our EUDR due diligence platform, we have noticed some accuracy issues with the maps, specifically concerning misidentification of agricultural land as primary forest areas.

In the image below, the light green layer on top of the satellite imagery is the EU Observatory GFC map. As shown, some plantations are incorrectly classified as forests on the EU’s map. This image was taken in Kerala, and we have also seen similar situations in Sri Lanka, Indonesia, Vietnam and others.

This could create a risk for exporters where the EU checks may flag that the product came from an area which has been deforested, when in fact, the plantation existed prior to December 2020.

To solve this challenge, businesses will need to use other data sources, such as satellite or on-the-ground data, to prove that deforestation did not occur at the site.

#3 EUDR Compliant Rubber is going for a premium

The Rubber Authority of Thailand (RAOT) recently held an auction for apparently EUDR-compliant Natural Rubber, which successfully achieved a premium price per kilogram. This showcases the early demand from dealers and brokers on ensuring they are purchasing rubber which has come from an area that has not been deforested minimising any future compliance risks.

#4 AHEC Geolocation database underway

We’ve recently been talking to a number of businesses that are members of the American Hardwood Export Council (AHEC) which is undergoing the significant task of building a database of all hardwood harvest geolocations within the United States. This database will differentiate harvest geolocations which are deforestation-free from those that are not, to support AHEC members in complying with EUDR.

We are awaiting an update on the progress of this work and hope this will be achieved before the end of the year when compliance begins for EU importers.

#5 ‘The Tire Cologne’ - EUDR a common presence

We recently visited Cologne in Germany to attend The Tire Cologne conference where most of the Tire industry was in attendance. We spoke to many companies who were just starting on their journey towards EUDR compliance, as well as businesses who were still unaware of the specific requirements - both from an importer and exporter perspective.

We covered topics ranging from the inclusion of retreaded and re-used tires (HS Code 4012) under EUDR to the challenges of gathering the geolocation information for these products which have been bought and sold many times.

#6 India Legality Study

As part of the EUDR requirements for EU Operators, Article 3 clause (b) states that the product shipment needs to have been produced in accordance with the relevant legislation of the country of production.

The national laws are to be referenced in the risk assessment the EU Operator undertakes as part of their due diligence. These laws should cover areas including land use rights, labour rights, human rights, tax and anti-corruption (Article 2 clause 40).

We thank the Rubber Board of India for their support and guidance in this study. Feel free to contact us directly for a copy of the full document. We plan to expand this work to other countries and incorporate it into the legal framework on our due diligence platform.

#Bonus EU Information System testing underway

We have been hard at work collaborating with the EU Policy and Technical System team to start creating the integrations with our platform and the EU Information system, which will support the creation and management of due diligence statements (DDS) to comply with EUDR. Exciting times ahead!