Update on the EU Deforestation Regulation (EUDR) – Benchmarking and partnerships

This blog post focuses on key aspects of the EU Deforestation Regulation concerning benchmarking and partnerships. The article elaborates on the benchmarking system, which classifies countries or parts of countries based on their risk of producing deforestation-related commodities. This system is highly significant for companies that import or trade relevant products, as it affects their conduct of due diligence.

EUDR – Benchmarking and partnerships

Since the introduction of EUDR, there have been no changes under the category of Benchmarking and Partnerships. Therefore, the purpose of this post is to provide an overview of the most important points.

• 6.1 What is Country Benchmarking?

Country benchmarking is a method developed to assess the risk of commodities produced in a given country in relation to deforestation or forest degradation. The system aims to provide companies with a clearer understanding of which countries or regions are considered to pose a higher risk so that they can adjust their due diligence strategy accordingly.

The system classifies countries into three risk categories:

• Low risk – The country has strong regulations and control over deforestation, allowing companies to use a simplified due diligence process.
• Standard risk – The country has certain risk factors requiring a full due diligence process to ensure compliance.
• High risk – The country has a documented high level of deforestation and/or weak enforcement of legislation, necessitating extensive due diligence and mitigation measures.

This approach enables companies to prioritize their efforts and resources where the risk is highest, contributing to a more targeted effort against deforestation.

• 6.2 What is the methodology behind benchmarking?

Benchmarking is determined using a combination of quantitative and qualitative criteria. The key parameters include deforestation rates, the degree of regulatory compliance, the quality of national monitoring and control, as well as available data on forest conservation and restoration.

The system ensures an objective and transparent assessment of risks in different trade relationships and minimizes the complexity of corporate due diligence processes.

• 6.3 How can stakeholders contribute?

The European Commission seeks input from businesses, civil society, research institutions, and authorities to ensure that the benchmarking reflects the current situation. Stakeholders can contribute by sharing relevant data, reporting on sustainability initiatives, and participating in consultations.

By engaging in this process, companies can influence how their supplier countries are assessed, thereby contributing to a more accurate and fair risk classification.

• 6.5 Will legal risks be considered?

The European Commission not only assesses risks related to deforestation but also compliance with national laws and international obligations. This includes evaluations of countries’ ability to enforce environmental legislation, risks of corruption, and human rights violations linked to deforestation.

Companies must therefore consider both environmental and legal risks when conducting their due diligence.

• 6.7 What does the Team Europe Initiative include?

The Team Europe Initiative is a joint effort by the EU and its member states to support sustainable supply chains and forest management in producer countries. The initiative focuses on strengthening the capacity of local authorities, improving monitoring technologies, and creating more financial incentives for sustainable production methods.

This initiative aims to make it easier for companies to ensure that their suppliers comply with EUDR.

• 6.8 How does Team Europe relate to CSDDD?

The Corporate Sustainability Due Diligence Directive and EUDR have overlapping objectives, as both regulations aim to promote responsible business practices and sustainable supply chains.

The Team Europe Initiative supports this by helping companies comply with both EUDR and CSDDD through technical assistance, financing, and access to traceability systems.

• 6.9 How can companies avoid exiting high-risk countries?

Der er en risiko for, at virksomheder vil stoppe med at handle med højrisikolande frem for at investere i forbedringer. EU-Kommissionen opfordrer derfor virksomheder til at arbejde med certificeringer, sporbarhed og risikoreducerende tiltag i stedet for at trække sig ud af disse markeder.

Producentlande kan også arbejde på at forbedre deres klassificering gennem reformer, bedre håndhævelse af love og øget gennemsigtighed i skovforvaltningen.

• 6.10 How does the EU ensure transparency in the benchmarking process?

The European Commission will publish a list of country benchmarking categories and make the applied criteria and data available. This will ensure that companies have the necessary insight to make informed decisions about their supply chains.

By maintaining a high level of transparency, the EU hopes to ensure a fair and effective implementation of EUDR while providing companies with the necessary tools to comply with the regulations.

Stay updated with prduct.com

EUDR is complex, and companies are advised to seek guidance and stay updated to navigate the regulation’s details correctly.

Benchmarking and partnerships play a crucial role in the implementation of EUDR. By classifying countries based on risk levels, the EU helps companies target their due diligence efforts while encouraging producer countries to improve their practices.

Prduct.com offers a solution that simplifies EUDR compliance. We help you keep track of your HS codes and ensure compliance through automated and reliable data processing. Our platform provides a solution that directly integrates your data into the ‘TRACES’ information system.

In short we collect your data, conduct risk assessments of your entire supply chain, and help mitigate identified risks.

Get a demo today