- The EU Deforestation Regulation (EUDR), which takes effect at the end of 2025, will require companies to trace commodity origins along the entire supply chain to ensure they’re deforestation-free.
- Technological solutions, such as satellite data and precise digital mapping, have become essential tools to assess deforestation risks and ensure compliance across complex supply chains.
- Tech isn’t a silver bullet though, experts say, and the best results will blend technological tools, strong partnerships and human collaboration across the supply chain.
- Smallholders in particular risk exclusion from global markets due to challenges in meeting EUDR compliance, especially due to limited access to technology and data tools.
The EU Deforestation Regulation, or EUDR, will require companies importing certain products into the European Union to trace the origins of these products all the way back up the supply chain to prove that they’re not associated with deforestation. It takes effect at the end of 2025, presenting companies with major logistical challenges, including issues of accurate reporting across multiple countries, compliance with local laws, and ensuring small farmers remain a part of global supply chains.
That’s led businesses to turn to technological solutions for help complying ahead of the deadline.
Originally scheduled to take effect this month, the EUDR was postponed by a year over concerns that many businesses weren’t ready. Representing a significant step in the EU’s efforts to curb climate change through supply chain accountability, the EUDR targets products that use soy, coffee, palm oil, cocoa, timber, rubber and beef — all commodities that have historically contributed to deforestation in the countries in which they’re produced. Products associated with deforestation or irregular land conversion after a cutoff date of Dec. 31, 2020, will be barred from import into the EU.
But tracing each product’s journey from farm to factory to consumer requires accurate data reporting and strong relationships with suppliers at every stage of the supply chain: a daunting task for companies with thousands of suppliers or those with few resources.
Several technological companies are stepping in with the know-how and tools to help simplify the task of meeting EUDR compliance, offering possible solutions built with blockchain, software development, traceability platforms, and satellite data. While tech solutions aren’t a silver bullet, the best chance of success blends technology with widespread collaboration and local insights, experts told Mongabay.
Supply chain solutions
Accurately mapping farm boundaries is an important first step in deforestation risk assessment of suppliers, which is more complex than it first appears. Digital mapping tools often hit snags like boundary overlaps or gaps in information, especially in remote and distant regions. Platforms like Verify from Meridia aim to address these issues by blending public and private data sources to create detailed, precise farm maps that consider factors such as agroforestry systems.
Compliance with local environmental laws is another key yet frequently overlooked challenge, Vivian Ribeiro, senior data scientist and spatial intelligence lead at Netherlands-based Meridia, told Mongabay. The EUDR mandates that supply chains comply with the regulations of the regions they operate in, such as Brazil’s Forest Code. Verify’s platform flags any overlaps with protected areas and Indigenous lands, and other violations, providing insights via interactive maps.
“For example, do we have a monoculture overlapping a conservation area? That’s the type of critical risk to flag,” Ribeiro said.
An integral part of risk assessment is clear satellite data. Poor images can mean farmland being mistakenly identified as forest: an issue if, for example, a banana plantation cleared for a new crop is mislabeled as deforestation. Advanced satellite images, coupled with AI-driven algorithms, are helping to better distinguish between agricultural land and forested areas. Niels Wielaard, CEO of Satelligence, another Netherlands-based spatial data consultancy, told Mongabay that while both proprietary and public satellite systems improve data accuracy, the best results come from combining it with ground-level insights.
Data from legal documents, land ownership records and field surveys help paint a more comprehensive picture of historical patterns of how areas have been used over time, which can be used to flag potential deforestation risks in the supply chain. This overview relies on strong partnerships between data companies, food producers, farmers, traders and academic institutions.
“People are talking about technology, but in the end, tech is just a tool,” Wielaard said. “The challenges of EUDR are in the partnerships between suppliers and buyers, and government action.”
RADIX Tree, a service from Global Traceability, is another tech solution that blends technology with human expertise. Ulrich Heindl, the founder and CEO of Global Traceability, likens it to a social media platform that connects suppliers, clients and partners. It simplifies reporting by combining automation with manual validation, which Heindl told Mongabay is one of the most effective ways to ensure the accuracy of satellite data.
“Fully automated processes relying just on AI are not able to detect all the potential fraud cases. We rely on a combination of the two — technology plus human knowledge,” he said. “This human factor is playing an important role in delivering the best solution and the best results.”
Fraud poses a major challenge to supply chain transparency, especially when information is self-reported.
“Anyone can claim anything with self-reported data,” Wielaard said. “But what’s the real impact? Did brands truly reduce deforestation? Without satellites, you can’t be sure.”
Blockchain is another tool gaining recognition for enhancing transparency and traceability. Brazilian paper and pulp company Suzano is developing an in-house blockchain system to streamline compliance evidence and enable real-time supply chain verification. Yet not all companies consider blockchain a practical solution. Global Traceability stopped using it five years ago, switching to SAP HANA, an in-memory database platform, for its RADIX Tree product. Heindl said blockchain’s lack of flexibility for corrections and its user drawbacks drove the change.
“One of the key criteria in using blockchain is immutability” — the inability to revise data after the fact — “but sometimes you need that to make corrections in data collection,” Heindl said.
Integrating smallholders
Mapping supply chains involving thousands of small farms and production units across the world is complex, costly and time-consuming for both large corporations and small businesses, with the latter facing additional constraints due to limited resources and technical expertise. To lower these entry and cost barriers, some companies offer prebuilt solutions like RADIX Tree and Earth Blox, which provide insights without the need for expensive custom tools or dedicated technical teams.
“Accessibility ensures that even resource-constrained organizations can understand and manage their climate and nature impacts and meet regulatory requirements,” Mike Mason, chief operating officer at Earth Blox, told Mongabay. “Earth Blox automates the processing and analysis of satellite and other geospatial data, allowing companies to map and monitor their supply chains with minimal effort.”
A major hurdle remains: millions of smallholders in industries like coffee and palm oil lack access to technology, which means data collection from them is impractical. This leads to two problems: difficulties for corporations assessing the risk of deforestation in their supply chains, and the risk of excluding smallholders from global markets.
To overcome information gaps, RADIX Tree has adopted a top-down approach where information is gathered from large companies and aggregators who can represent the data on behalf of smallholders. While this ensures comprehensive data collection, it may not fully capture smallholders’ direct input, highlighting the long-term challenge that corporations face of fully integrating them into digital systems.
“It’s very hard to get access to [smallholders] because either they don’t have any technology or have no affinity to it; and so, you cannot obtain the information,” Heindl said. “To avoid information gaps, it’s better to collect data from the top. It’s taking time but according to our experience it’s really hard to get a bottom-up approach in place.”
There’s a risk that smallholders may be excluded from global markets due to their inability to demonstrate compliance with legal requirements. High quality and integrity criteria in farm plot mapping can keep these small producers in the supply chain, Ribeiro said, along with on-the-ground support and tailored smallholder engagement. By automating more than 50 compliance checks, Meridia’s Verify reduces the costs of traditional consultancy services and allows international agencies to support smallholders more effectively.
“It’s important to engage with those companies that don’t have the farm plots,” Ribeiro said. “It’s not a matter of excluding [smallholders]. This is no good for business, the supplier, or agriculture in general.”
Preparing for EUDR
Despite the one-year postponement, not all companies will be ready when the EUDR fully takes effect, Wielaard said. Those preparing now for the 2025 changes will position themselves for success. For example, cocoa companies have teamed up to establish a shared approach to evaluating deforestation risks with satellite data, while some palm oil companies have tested their compliance by shipping oil to Europe for customs approval.
However, more action is needed. Addressing critical issues like inaccurate farm maps or legal violations can take months, Ribeiro said. Companies need to prepare now to ensure compliance, prevent disruptions, and reduce the risk of excluding suppliers due to lack of preparation, she added.
Ultimately, it’s a blend of technology and collaboration that drives success, Wielaard said. “Tech is an enabler, a tool,” he said. “I can’t say that there are no technical challenges, but in the end, they are less relevant than the operational, human interaction side of things.”
Banner image: Trucks loaded with timber in the Brazilian state of Pará, a region covered in Amazon Rainforest. Wood products are one of the commodities that must be free from links to deforestation under the new EUDR. Image © Marizilda Cruppe/Greenpeace.
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