EUDR REGULATION: A NEW CHALLENGE FOR RAW MATERIALS TRACEABILITY

The Benefits of Collective Action Toward Environmental Compliance

The new EU Regulation against deforestation

With the introduction of European Regulation 2023/1115, known as the EUDR ( EU Deforestation Regulation ), the European Union has taken a decisive step in the fight against global deforestation. Starting December 30, 2024, all operators placing products containing certain raw materials on the European market will be required to demonstrate that they do not originate from areas deforested after December 31, 2020.

The regulation applies to supply chains involving resources such as wood, paper, coffee, cocoa, palm oil, rubber, and soy. Operators will be required to collect geolocalized data on the origin of raw materials, prepare a due diligence statement, and ensure that the information is securely stored and accessible in the event of inspections. Failure to comply will result in significant penalties, including fines of up to 4% of annual turnover, import bans, and removal of products from the market.

The regulation's objective is clear: to ensure that European consumption does not contribute to the destruction of forests.

However, this principle entails new responsibilities for businesses. The operators involved—importers, processors, distributors, and even direct EU producers—will be required to demonstrate, through due diligence processes and structured documentation, the full compliance of their supplies.

A new challenge for companies

The guiding principle of the EUDR is shared by much of the European manufacturing community: making supply chains more transparent and sustainable. However, the practical implementation of the regulation presents concrete obstacles, particularly for those companies that rely on international suppliers. In many cases, obtaining reliable and verifiable information on the origin of raw materials is difficult, if not impossible, for an individual operator.

Added to this difficulty are the costs of managing, archiving, and verifying documentation, which risk becoming an excessive burden for small and medium-sized businesses or those with complex supply chains.

Concrete impacts for companies

The EUDR is not just a regulatory requirement: it changes the way companies must manage their supply chains:

• Supplier management and procurement : more in-depth checks and mandatory documents.

• Traceability along the supply chain : each batch must be associated with a unique identification code (Reference Number), issued by the European TRACES system, which will follow the product throughout all its transformations and stages.

• Compliance and governance : information retention, risk assessments, and the ability to respond transparently to audits and controls.

A change that involves different functions (purchasing, supply chain, compliance, IT) and that requires digital tools capable of making all of this sustainable and integrated.

The technological answer exists: TENet as an enabling infrastructure

Addressing the complexity of the EUDR requires immediate, scalable, and sustainable operational solutions. In this sense, there's no need to start from scratch. Technology platforms already exist that can offer a ready-made solution to the need for traceability and compliant information management.

Among these, TENet It is configured as an already operational digital platform, designed to guarantee interoperability, traceability, and certification along complex supply chains.

The platform was designed to help companies address the EUDR challenge in a simple, modular, and integrated way. Thanks to its native connection with TRACES, Flowbe automates the generation and management of Reference Numbers, thus ensuring end-to-end product traceability and compliance with the regulation's requirements.

Furthermore, thanks to its modular architecture, Flowbe integrates easily with company information systems (ERP, supplier portals, order management), avoiding duplication and minimizing organizational impact.

An opportunity beyond compliance

The EUDR is undoubtedly a challenging task, but it can also be an opportunity to strengthen the transparency and sustainability of supply chains.

With Flowbe, companies not only comply with regulations, but adopt a digital and innovative approach that improves supply chain governance and creates value even beyond compliance.