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European Commission Proposes Pushing Back Implementation by One More Year, But Requires Geolocation and Due Diligence for Coffee, Cocoa, Beef, Soy, Wood, Rubber, and Palm.
The European Union announced a new postponement of the application of the EU Deforestation Regulation (EUDR), citing technical restrictions of the system that receives due diligence declarations. The extension of one more year still needs approval from the European Parliament and member countries, but does not change the scope and will continue to require traceability down to the plot and proof of production without deforestation.
For Brazil, the impact remains high. Products subject to the EUDR accounted for US$ 17.5 billion in exports in 2022, about one-third of what the country sold to the bloc. The sector sees commercial risk and additional compliance costs if there is no rapid adaptation.
In practice, major trading companies are already increasing audits and flow segregation. Private instruments are emerging, such as the “risk custody insurance” from the Portuguese Greentech, which takes on part of the European responsibility for due diligence, using satellite and AI as an “extra safety net” for exporters.
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What Does the EUDR Exactly Require: Geolocation by Polygon and Proof of Origin
The law covers seven supply chains: cattle (meat and leather), cocoa, coffee, palm oil, soy, wood and rubber, as well as various derivatives listed in Annex I. The product can only enter if it is legal, deforestation-free and accompanied by a due diligence declaration.
The cut-off date is December 31, 2020: raw materials sourced from areas converted after this date cannot be marketed in the EU.
Traceability requires geolocation in polygon format of the production plot(s), with high precision coordinates. For products that mix inputs from various areas, it is necessary to provide multiple polygons in the same declaration.
Current Dates and the “Delay” Announced Today
Currently, implementation is set for December 30, 2025 for large and medium enterprises and June 30, 2026 for micro and small businesses, with the EUDR Information System already available for submission of declarations.
The Commission proposed to delay one more year due to system capacity issues. The postponement is not automatic and depends on a political agreement with the Parliament and Council. In the meantime, companies continue to be urged to prepare.
Impact on Brazilian Agriculture: From Traceability to “Decommoditization”
Industry studies show that the supply chains covered by the EUDR accounted for US$ 17.5 billion in 2022 in sales from Brazil to the EU, reinforcing the weight of coffee, soy, beef, wood and derivatives.
Experts project a process of “decommoditization”: two soybeans in the market, one with traceability and another without, with distinct prices and access. The challenge extends to logistical segregation, storage, and proof of compliance.
There is also a debate about indirect land use change (ILUC). The EUDR focuses on direct deforestation; EU renewable energy policy (RED II) addresses ILUC in biofuels. Tools and certifications for low ILUC risk can be used as additional evidence in due diligence systems.
How Companies Are Preparing: Due Diligence, Maps, and “Custody Insurance”
Companies need to structure three fronts: data collection (including detailed geolocation, production period, and documents), risk assessment, and mitigation when the risk is not negligible. Annual reports and the Due Diligence Declaration to the European system complete the package. It is not a “checklist”; it is continuous risk management.
In the field, the priority is to map suppliers down to the plot, adjust contracts and segregation procedures, and test the EUDR Information System in training and production versions. The sooner, the lower the risk of exclusion at regulatory turn.
Private solutions are likely to gain traction. The “custody insurance” from Greentech acts as a European representative, managing risks and traceability, with payments to forest area owners ranging from €70 to €370 per hectare/year, funded by operators who pay a proportional risk premium to the complexity of the supply chain. It does not replace the legal obligation, but it can reduce fines and uncertainties.
In your opinion, does the new postponement help Brazilian producers to organize or prolong the uncertainty and cost? Will the EUDR “decommoditize” soy, coffee, and beef or simply shift investments in traceability? Comment!
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