Unpacking the EUDR: insights from Innovation Forum’s 2024 webinar series

Reflecting on 2024, EUDR was an unavoidable buzzword for businesses, NGOs and farmers. The uncertainty of the regulation and its date of implementation stirred a mix of frustration, ambiguity, and anticipation across sectors. To address this complexity and cut through the noise, Innovation Forum launched a webinar series that convened key stakeholders from the coffee, cocoa, palm oil, timber, and soy industries, alongside NGO representatives and farmer voices. The series sparked vital debates, surfaced key challenges and inspired collaborative efforts to tackle the complexities of EUDR.

Voices in the panel:

State of play: reactions to the delay 

To understand levels of preparedness for the EUDR in November (prior to the deadline behind confirmed) and to understand the biggest concerns, we asked participant to participate in a poll at the beginning of the first webinar.

The poll revealed that most companies only felt partially prepared to adapt to EUDR requirements, and the biggest concerns were uncertainty around guidelines and the impact on smallholder farmers. 

• Market disparity: While some companies advance in compliance, smaller players may struggle without support, risking a two-tier market system.
• Data collaboration: Experts called on the need for collective data-sharing efforts to enhance efficiency and reduce redundancy in compliance processes.
• Lessons from the timber sector: The EUDR draws from experiences in the timber industry, where due diligence has improved traceability and sustainability.
• Cocoa farming challenges: Cocoa farmers face restrictions on land expansion, necessitating technological support to maintain yields without deforestation.
• Youth disengagement: The economic viability of cocoa farming is at risk as youth disengage due to low income; support is needed to improve livelihoods.

Tackling the ‘how’ of EUDR compliance in coffee and cocoa supply chains

To explore the effects on specific commodities, Innovation Forum convened key stakeholders across coffee and cocoavalue chains for the second webinar.

Key themes from the discussion: 

• Market disparity: Smaller players in the coffee and cocoa sectors may struggle with EUDR compliance, risking a two-tier market system where larger companies advance while smaller ones fall behind.
• Financial burden on farmers: Farmers face significant costs associated with compliance, including investments in mapping and data collection, and there are concerns about who should bear these costs.
• Traceability challenges: Ensuring traceability in complex supply chains remains a critical challenge, necessitating robust systems for verifying deforestation-free commodities.
• Land tenure issues: Land tenure systems vary widely, with many farmers relying on customary agreements, raising questions about compliance with EUDR requirements.
• Need for collaboration: There is a strong call for collaboration between public and private sectors to share the financial and technical burdens of compliance, ensuring that smallholders are supported.
• Long-term sustainability strategies: Stakeholders stressed the importance of moving beyond mere compliance to adopt holistic sustainability strategies that create lasting impacts.
• Educational and capacity building opportunities: The delay in EUDR implementation provides an opportunity to enhance farmer education and refine compliance strategies, ensuring better preparedness for the regulation's requirements

EUDR and the future of soy and palm oil: challenges, delays, and solutions

Carrying on the conversation, the third webinar in the series explored the readiness of the soy and palm oil sectors, uncovering varied responses to EUDR compliance challenges.

Key themes from the discussion:

• Compliance variability: There are stark differences in how prepared soy-producing countries are for EUDR compliance. For example, Serbia is lagging due to minimal government support, while Ukraine has made significant progress, certifying 600,000 tons of soy as deforestation-free.
• Smallholder challenges: Without targeted support, smallholders risk exclusion from EU markets as companies may prefer larger producers with lower compliance costs. 
• Mixed reactions in palm oil sector: The delay has elicited varied responses. Environmental advocates argue it undermines EU's environmental leadership, while industry representatives see it as an opportunity to strengthen compliance systems.
• Traceability challenges: Achieving traceability in extensive supply chains for soy and palm oil is complex, particularly for smaller producers who lack the resources for compliance.
• Market leakage concerns: With Europe representing a small share of global imports, there is a risk that non-compliant products may be redirected to regions with looser regulations.
• Call for collaboration: Industry leaders stressed the importance of collaboration between sectors, governments, and civil society to ensure smallholders are not marginalised during this transition. Financial incentives, training programs and technical support to help smallholders reach EUDR requirements are all required. 
• Holistic approach needed: The success of EUDR depends on balancing regulatory demands with practical solutions, and stakeholders are encouraged to combine EUDR efforts with other sustainability initiatives instead of acting in silo. 

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