01/09/23

EU Deforestation Regulation Update

 

Following the EU Deforestation Regulation (EUDR) article shared in the ECOM July internal newsletter, we wanted to share a further update with everyone about the impact of this regulation and what we are doing as ECOM to prepare. 

 

Please note that this communication is for internal ECOM staff only. Further external communication will be shared soon.  

 

 

Recap:

 

The new EU legislation requires all cattle, cocoa, coffee, palm oil, soya, rubber, and wood products imported into, or exported from, the EU to be deforestation-free by December 2024

 

Non-compliance with EUDR carries the risk of costly fines, as well as a loss of market access and reputational risk to ECOM. For more information about the EUDR regulation please see the article from our July newsletter here.

 

 

Challenges of the EUDR Regulation: 

 

While the industry awaits the EU-approved guidance (expected early 2024)  and regulatory clarifications, uncertainties remain regarding the ultimate impacts of the EU regulation. Nevertheless, the requirement for farm-level traceability of all products entering and leaving the EU is evident, presenting numerous challenges due to the complex nature of the global supply chain.

 

To ensure compliance with the regulation, it will be imperative to establish strong tracking and verification systems, coupled with effective data management and standardization.

 

 

What this means for ECOM:

 

Within ECOM, this regulation impacts two of our primary origin integrated commodities (cocoa and coffee), in addition to some activities within our smaller developing venture. As a result, we are faced with a substantial range of responsibilities and potential exposure to associated risks arising from this new regulatory framework.

 

Despite the challenges, the new EU regulation has the potential to create substantial positive impacts, seeking to strengthen traceability and reduce worldwide deforestation to create a positive climate impact. It also provides an opportunity for improved supply chain collaboration and raises awareness amongst all actors and stakeholders about the negative impact of deforestation. This new regulation resonates with ECOM's dedication to protect nature and, consequently, mitigating deforestation.

 

 

What is ECOM Doing: 

 

At ECOM, we are taking proactive steps to align with the upcoming EU regulations to ensure our readiness for ourselves and for our partners. Our approach is underpinned by a collective dedication to compliance, transparency, and sustainability. Here's our strategy for preparation:

 

  • 1. Unified Approach: We have a One ECOM approach to EUDR compliance with an aligned response towards customers, financial institutions and regulators regarding our actions and readiness. This strategy not only ensures alignment with the new EU regulation, but also harnesses the advantages of shared resources and standardized data.

 

  • 2. Centralized Data Lake: We are establishing a robust centralized data repository for data input and storage that, in time, will be used across all ECOM projects. This centralized hub will enable us to conduct automated data checks, ensuring data standardization and maintaining governance throughout our processes, with the goal of identifying and fixing data problems as early as possible

 

  • 3. Automated Farm Deforestation Check: Using geolocation data and spatial modeling, we're developing an automated pipeline to assess deforestation on farms. This tool, using information fed by the data lake, will enable us to generate lists of EU import-approved and non-approved farmers based on EU deforestation criteria.

 

  • 4. Clear Communication: Meetings are being booked with trade teams, PC and origin managers, and sustainability staff for early September to further discuss the regulation, ECOM approach and team engagement and support that will be needed. 

 

  • 5. Data Gathering and Integration: As we move into Q4, we are starting EUDR readiness testing. This exercise will work with origin operations to understand local procedures, check traceability methods, and support quality data standardization and integration to ensure origin teams have compliant processes in place and access to up to date information regarding any deforestation activity within their supply chain. 

 

We are not only adapting to the EU regulations, but ECOM is also embracing this opportunity to refine our processes and further fortify our position as a leader in sustainable practices within our industry. Through these efforts, we're reinforcing our commitment to sustainability while enhance our capabilities to ensure uninterrupted business operations and trading

 

 

What is needed from you:

 

We request your engagement and dedicated time during the testing and integration phases as your participation is crucial for our collective progress.

 

If you have any questions, wish to convey customer requests, or have industry updates or information you come across that you would like to share, please don't hesitate to reach out via email: ESGcompliance@ecomtrading.com

 

Frequently Asked Questions on EUDR: 

 

Please find the full EU Commissions FAQ document here for further information. 

 

Thank you,

Kakay Halle - Business Transformation Manager

 

 

More news

Sustainability Coffee
News
Click to read this article

Deep diving into traceability with the Vietnam SMS team

Chronicles of Michaela’s travels" 2024 edition is now live! After Latin America Last year, she now headed to Vietnam where she travelled with the SMS operations. She will be narrating her trip and experiences through a mini-series which will be shared throughout the rest of the calendar year.

Cocoa
News
Click to read this article

Strengthening the knowledge of cacao producers in Peru

In an effort to promote sustainable improvement in cocoa production, ECOM Peru brought together 70 associated producers in an enriching field event on January 30 and 31 in the Huánuco region.

Sustainability
Stories
Click to read this article

Clean Water Access for Smallholder Farmers in Uganda

In 2021 Kawacom initiated a three-year project in partnership with Taylors of Harrogate with a focus on water, sanitation, and hygiene aimed to support 13,500 farmers and their families in the coffee-growing communities around the Sipi region.

Coffee Cocoa
Stories
Click to read this article

A Transformative Project for Sustainable Farmers

In November 2023, our “Coffee, Cocoa and Climate Change '' project in collaboration with the German Agency for International Cooperation GIZ in Nicaragua was concluded. Read more about it here.

People
Stories
Click to read this article

Gulfood Dubai 2024

It's a wrap! The ECOM Village reopened its doors at the Gulfood in Dubai from the 19th to 23rd February and for the first time as a cross commodity show! Read more about it here.

Innovation
News
Click to read this article

NetZero e EISA anunciam parceria pioneira para construção de uma fábrica de biochar em Machado (MG)

NetZero, green tech francesa pioneira na valorização de resíduos agrícolas em biochar, e EISA café, Empresa Interagrícola S.A. do Grupo ECOM, anunciam a construção de uma fábrica de biochar em Machado (MG).

Coffee Innovation
News
Click to read this article

NetZero and ECOM announce pioneering partnership for large-scale biochar deployment in coffee farming

NetZero, a French start-up pioneering the industrial production of biochar in the tropics, and ECOM Agroindustrial Corp. Ltd., one of the world’s leading traders of agricultural commodities, announce a pioneering partnership to accelerate the large-scale deployment of biochar in coffee farming.

Technology
News
Click to read this article

Future proofing our supply chain

As we celebrate our 175th anniversary, and look to the future, ECOM is delighted to announce our partnership with BanQu, a leading supply chain traceability platform that provides end-to-end auditable and verifiable data collection and reporting.

People Sustainability
Stories
Click to read this article

A day at the Satellite schools in El Salvador

Our team in El Salvador, with help from the ECOM Foundation established a pilot for the Satellite School Program in 2011, for children and adults in rural coffee and cocoa farming communities. Read more about it here.