The European Union’s Deforestation Regulation (EUDR) marks a significant shift in how businesses must approach supply chain management and environmental responsibility.
Effective from December 2024, the EUDR mandates that products such as coffee, cocoa, and timber are not sourced from land deforested after December 31, 2020.
This regulation restricts the placement and export of these commodities in the EU market, emphasizing the importance of compliance for companies aiming to sell in the EU.
As businesses navigate these new requirements, the reliability of deforestation data used to ensure compliance becomes of prime importance. This has significant implications for global supply chains, as they must manage geolocation data and adopt technological solutions to improve traceability and sustainability.
This article explores why data accuracy is crucial for EUDR compliance, comparing the strengths and limitations of open-source deforestation data versus proprietary analytics solutions.
Through a detailed case study over Borneo, we will also illustrate how precision in deforestation data can make a substantial difference in compliance efforts and the overall integrity of supply chains. Let’s dig in.
Key Takeaways
- The European Union’s Deforestation Regulation mandates that businesses ensure their products are not sourced from land deforested after December 31, 2020, making reliable deforestation data crucial for compliance.
- Deforestation often involves the conversion of forested areas into agricultural land for crops and livestock production, which is a major factor contributing to global deforestation rates.
- Precision in deforestation data is essential to prevent supply chain disruptions, avoid significant penalties, and maintain market access within the EU.
- Open-source deforestation data, while widely available, often lacks the accuracy and detail required for EUDR compliance, especially in detecting critical land-use changes.
- Proprietary deforestation analytics provide higher resolution, real-time monitoring, and accurate detection of land-use changes, reducing the risks of false positives and negatives and improving overall compliance efforts.
- Investing in advanced geospatial data analytics can transform compliance with the new regulation into an opportunity for improved operational efficiency, better supply chain transparency, and enhanced brand reputation.
- Monitoring primary forests is important not only because of the EUDR requirements but also due to their high biodiversity and carbon storage capacity.
Why Reliable Deforestation Data for EUDR Compliance Matters
Reliable data is the cornerstone of effective compliance with the new regulatory requirements.
In the high-stakes environment of global trade, where commodities like coffee, cocoa, and timber are sourced from diverse and often remote regions, the precision of deforestation data, including accurate measurements of forest loss, determines the integrity of compliance efforts and the resilience of supply chains.
Navigating EUDR compliance challenges requires tools that offer insights into deforestation risks, legal assessments, and due diligence to simplify and streamline the process for companies.
False positives—incorrectly identifying compliant areas as deforested—can unjustly cut off supply chains, causing operational delays and increased costs.
Conversely, false negatives—failing to detect actual deforestation—expose companies to substantial risks of non-compliance, resulting in hefty fines and loss of market access.
Furthermore, reliable data underpins the trust between businesses and regulatory bodies, ensuring that companies not only meet legal requirements but also uphold their commitments to sustainability and ethical sourcing.
As consumers and stakeholders increasingly demand transparency and environmental stewardship, accurate deforestation data, including real-time insights into forest loss , becomes integral to maintaining brand value and competitive advantage.
Ultimately, the choice of data sources—whether open-source or advanced geospatial analytics—plays a critical role in ensuring accurate, actionable insights for compliance.
Read also: The Road to EUDR: Key Dates and Milestones in the EU's Deforestation Regulation
EUDR: Understanding Forest Definitions
Understanding the critical role of accurate data in European Union Deforestation Regulation compliance begins with recognizing how the regulation defines forests, deforestation, and forest degradation.
According to the EUDR, a forest is defined as land spanning more than 0.5 hectares with trees higher than 5 meters and a canopy cover of more than 10%, or trees capable of reaching these thresholds in situ. This definition excludes land predominantly under agricultural or urban land use.
Deforestation, on the other hand, involves the conversion of forest to agricultural use or other land uses such as plantations, mining, or urban development. This definition goes beyond mere tree cover loss, emphasizing the transformation of natural forests into other types of land use.
Check out also: 28 EUDR Definitions You Need to Know
Distinguishing Forest Cover Loss from Land Use Change
Tree cover loss refers to the removal of tree canopy, which can occur for various reasons including logging, fire, disease, or storm damage. It does not necessarily indicate a permanent change in the land’s use or the long-term removal of a forested area.
Tree cover loss can sometimes be temporary, with the potential for the area to regrow into a forest if left undisturbed.
Land cover statistics provide detailed insights into various types of land use, which is critical for understanding forest loss and management efforts. This classification helps in calculating carbon emissions associated with different land uses.
Land use change, however, involves a more permanent transformation of the land’s function.
This could mean converting a forested area into agricultural fields, urban development, or plantations.
Land use change is significant in the context of the EUDR because it represents a long-term or permanent shift away from natural forest cover to another type of land use, which has implications for biodiversity, carbon storage, and ecosystem services.
Importance for EUDR Compliance
This distinction is critical for businesses striving to comply with the new requirements.
Accurate identification of deforestation according to these definitions requires data that can detect not only tree cover loss but also broader land-use changes.
Given these requirements, companies must rely on precise and reliable data sources to accurately monitor and verify land use.
In the paragraphs below, we will explore various data sources available for EUDR compliance, assessing their capabilities and limitations in capturing these critical distinctions.
Check out also: Leveraging Satellite Technology for Sustainable Supply Chains
Open Source Data Overview for Global Forest Monitoring
Many companies plan to rely on open source data, such as the Global Map of Forest Cover for the year 2020, for their due diligence in complying with the EUDR.
While these datasets are publicly accessible and provide some insights into global deforestation patterns, they often lack the precision needed to meet the stringent requirements of the EUDR.
Why is that? Open source data typically focuses on tree cover loss rather than detailed land-use changes, which can lead to inaccuracies in compliance assessments.
Moreover, they often provide static data updates and have generally lower resolution.
In the next sections, we will examine the primary open-source databases, highlighting their strengths and limitations.
Open Source Data Sets for EUDR
There are several publicly available global data sources that provide information on forests. Below are brief overviews of the key databases:
Global Forest Change data from the Global Land Analysis and Discovery (GLAD) laboratory of the University of Maryland
The GLAD laboratory provides high-resolution data on global forest change, focusing primarily on tree cover loss. This dataset is widely used for monitoring deforestation trends but may not capture the detailed land-use changes required for EUDR compliance. These databases are crucial for monitoring commodities linked to deforestation, helping to ensure that products entering or being exported from the EU market meet the regulation’s objectives to mitigate greenhouse gas emissions and protect biodiversity.
EU Forest Observatory Global Forest Cover 2020
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EU Forest Observatory Global Forest Cover 2020, also known as the Joint Research Centre (JRC) of the European Commission, is a dataset that provides a snapshot of forest cover as of December 31, 2020. Despite serving as a baseline for EUDR assessments, its static nature and focus on tree cover limits its ability to detect ongoing land-use changes crucial for thorough due diligence. As a result, companies utilizing this data set for compliance risk not meeting the precise needs of EUDR compliance.
Science Based Targets Network/World Resources Institute (WRI) Natural Lands
The WRI’s Natural Lands dataset includes data on natural ecosystems and biodiversity, supporting efforts to track deforestation. While informative, it often emphasizes broader environmental metrics over the specific land-use transitions necessary for EUDR compliance.
Hansen Global Forest Change
Also developed by the University of Maryland, this dataset offers detailed annual updates on global tree cover loss. It is a valuable tool for identifying deforestation trends but may not provide the granularity needed to distinguish between different types of land-use changes required by the EUDR.
The high precision of proprietary deforestation analytics insights effectively bridges the gaps in open-source data, providing a reliable and comprehensive source of truth for rigorous deforestation analysis. Let’s have a look at them in detail:
Proprietary Deforestation Analytics: A Superior Alternative to Open Source Deforestation Data
Companies looking for reliable deforestation risk assessments should consider investing in proprietary deforestation analytics, which offer substantial advantages over open-source datasets.
These advanced solutions leverage cutting-edge satellite imagery and sophisticated algorithms to provide detailed, high-resolution monitoring of land-use changes and forest degradation in near real-time.
Unlike open-source data, which often lacks the resolution and detection accuracy required for rigorous compliance, proprietary tools deliver precise insights and real-time risk assessments.
Proprietary analytics can accurately detect and analyze the conversion of natural forests to agricultural or other non-forest uses, significantly reducing the risk of false positives and negatives, which lead to misinformed business decisions.
Additionally, temporal analysis allows for continuous forest monitoring, ensuring ongoing compliance with EUDR’s dynamic regulatory landscape.
Although proprietary deforestation analytics may involve higher costs compared to open-source alternatives, they mitigate compliance risks and associated expenses.
Seamlessly integrating with existing enterprise systems, these tools automate compliance processes, streamline due diligence, and enhance operational efficiency.
This comprehensive approach not only safeguards supply chains but also supports sustainability commitments and ethical sourcing, providing a competitive edge in the market.
End-to-end Proprietary Solutions for EUDR and Deforestation Risk
One of the leading EUDR solutions that incorporates proprietary satellite data analysis on the market is TradeAware, which stands out with its end-to-end functionalities.
Its key features include the most accurate deforestation assessment on the market, with a methodology aligned with EU Deforestation Regulation (EUDR) definitions.
TradeAware efficiently collects EUDR-relevant geolocation data and plots of land, providing unlimited scalability for global coverage of all EUDR commodities.
Moreover, it facilitates the collection of legal evidence, such as land ownership titles and agreements with indigenous communities, and automates the verification of these documents.
By leveraging advanced artificial intelligence and multispectral satellite data, TradeAware provides high-resolution monitoring of land-use changes.
This sophisticated approach allows for detailed, pixel-level analysis, ensuring accurate detection of deforestation and land-use conversions.
Read also: How to Comply with EUDR Requirements Using Your Existing Supply Chain Systems
Open Source Data vs. Proprietary Deforestation Analytics: A Case Study
Many EUDR solutions on the market rely on open-source data. Is it enough to meet all the European Union Deforestation Regulation (EUDR) requirements and avoid supply chain disruptions?
We set out to investigate this question. To do this, we conducted a comprehensive case study over Borneo, a region where several EUDR commodities are grown and which is significantly impacted by agricultural activities and deforestation, particularly due to palm oil production.
This study benchmarks the performance of TradeAware’s proprietary satellite analytics against open-source data provided by the EU’s Joint Research Centre (JRC Model).
The findings were illuminating. Open-source data, while broadly accessible, often fell short in accuracy and detail. Specifically, the open-source JRC model had an overall inaccuracy rate of 24%, nearly a quarter of the time.
In contrast, LiveEO’s Precision Analytics, achieved a substantial improvement in overall accuracy by reducing the total error rate by 42%. This significant increase in accuracy could help preserve €55 billion in exports across all commodity sectors from disruption.
To delve deeper into the details of our findings and understand the full impact, download the complete case study and discover how leveraging advanced geospatial data can transform your approach to EUDR compliance and protect your business from regulatory risks.
Conclusions and Next Steps
Accurate deforestation detection is crucial for maintaining supply chain integrity and ensuring compliance with EUDR.
While open-source data offers a cost-effective starting point, geospatial data solutions provide the precision and reliability necessary to meet regulatory requirements and protect business interests.
Leveraging advanced geospatial data analytics can transform EUDR compliance from a regulatory burden into an opportunity for operational excellence and enhanced brand reputation.
Businesses can achieve better supply chain transparency, reduce operational costs, and mitigate risks associated with non-compliance, thus gaining a competitive advantage in the market.
Additionally, comprehensive data and monitoring systems are essential for understanding and protecting forest ecosystems that play a vital role in combating climate change and maintaining biodiversity.
These systems help track deforestation and forest regrowth, providing critical insights into the impact of forest loss on climate change.
Need assistance with meeting the new regulations? Discover how TradeAware can help you achieve EUDR compliance effortlessly.
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