Are you ready for the EU’s deforestation-free products regulation?
The EU’s deforestation-free products regulation is expected to enter into force this year, and may be actively enforced from 2024. Food and agricultural commodities currently listed in the proposal include cocoa, coffee, palm oil, soya and cattle (beef). Any products fed with, prepared with, or derived from them are also affected. The repercussions for food business operators could be immense, and it’s important to be prepared.
Key challenges linked to the deforestation-free products regulation
Associated challenges for food business operators are two-fold: the implementation of due diligence procedures required by the regulation, and the impact on commodity and product security.
Implementation of due diligence procedures
Food business operators that use or handle listed commodities, or products derived from them, will need to implement due diligence as part of ongoing risk management and mitigation. This will involve the preparation of due diligence statements for independent third-party audit.
Gathering robust and reliable information will be essential. Technologies such as satellite monitoring tools, isotope tracing, blockchain technology, on-site field assessments and digital traceability from farm to factory may be required to ensure statements can be substantiated.
Impact on commodity/product security
The new regulation could also have knock-on effects for supply chain security. Heightened due diligence, and repercussions of non-compliance, could result in supply issues for the listed commodities. This could affect a wide range of products, from chocolate (due to the cocoa itself and cocoa-derived products such as cocoa butter) to vegetarian products containing soya and the many products which incorporate palm oil. Reformulation may be necessary when a key ingredient is unavailable or in short supply, but identifying like-for-like alternatives is not easy.
Beyond the EU
While the EU is at the forefront of regulatory developments that aim to curb commodity-driven deforestation, other markets are also focusing on this matter. In the US, the FOREST Act bill sets out an approach to tackle deforestation, and the UK is set to develop legislation and accompanying guidance under the Environment Act.
How can food business operators respond?
When the EU’s proposed deforestation-free products regulation enters into force, affected companies will have a limited time to act on due diligence requirements. Innovative and dynamic reformulation strategies may also be required to limit disruption in the event of downstream non-compliance impacting supply chains.
Here at Leatherhead, we can help with the development of robust documentation and due diligence statements to support compliance as well as horizon scanning for future requirements. We can also conduct regulatory reviews of concepts and technologies for product reformulation. Find out more about our services here.
If you’re a Member of Leatherhead and would like to receive your copy of the full white paper, please get in touch at [email protected]