Deforestation and forest degradation, driven primarily by agricultural expansion for commodities like cattle, wood, palm oil, soy, cocoa, and coffee, are accelerating climate change and biodiversity loss.
As the global population grows, the demand for agricultural land is expected to rise, further pressuring forests, while changing climate patterns will impact food production.
To effectively comply with this regulation, businesses must underscore the importance of data verification to trace the origin of their products.
Deforestation is a pressing global issue, with agriculture being a primary driver. Data shows that by just seven agricultural commodities —cattle, oil palm, soy, cocoa, rubber, coffee and wood— accounted for 26% of global tree cover loss from 2001 to 2015. These agricultural commodities replaced 71.9 million hectares of forest during that period, an area of land more than twice the size of Germany (Source: WRI, 2021).
This environmental concern is driving the EU to enforce the EU Deforestation-free Regulation (EUDR), which will be implemented in December 2024. The regulation aims to mitigate the environmental impact of the top deforestation-contributing commodities —cattle, oil palm, soy, cocoa, rubber, coffee, and wood— and their derived products. The EUDR is expected to drive positive change across global supply chains, requiring businesses to ensure their products that are imported to the EU are free of deforestation or do not come from deforested land after December 31, 2020. To comply with the regulation, businesses must meticulously trace their products' origins, starting from the producer and plot level. This demanding process necessitates thorough data collection, comprehensive risk assessments, and the creation of robust due diligence statements to verify deforestation-free practices.
Overcoming Data Verification Challenges in EUDR Compliance
As the implementation deadline for the EU Deforestation Regulation (EUDR) approaches, businesses face significant challenges in complying with its requirements. While many companies are aware of the EUDR and have taken steps towards compliance, navigating the regulations in time remains a challenge, especially in terms of data accuracy and management.
Key Challenges in Data Verification for EUDR Compliance
Excessive & Complex Data Format: Manufacturers, especially those not yet digitized, will receive numerous files from processors or suppliers in different formats. Managing vast amounts of data in different formats often leads to discrepancies and inaccuracies.
Data Quality Issues: Ensuring the data from processors or suppliers complies with EUDR standards requires a system that can access deforestation or EUDR maps to ensure each plot is not in a deforestation area. Additionally, ensuring data accuracy and completeness for EUDR compliance presents another challenge, such as dealing with anomalous data polygons like incorrect area, unusual sizes, wrong geometry types, or self-intersections in a dataset of polygons.
Resource Constraints: Allocating sufficient time and resources for inspecting each producer's plot can be time-consuming and resource-intensive.
Does your business find it challenging to adhere to EUDR regulations? KoltiVerify offers a comprehensive solution to help you navigate the complexities of this regulation.
KoltiVerify: Your Data Verification Solution for EUDR Compliance
Introducing KoltiVerify, a part of our modular approach to EUDR compliance, integrating the entire supply chain in one platform and verifying supplier or processor bases to ensure compliance with EUDR. KoltiVerify verifies businesses' field data for all existing data collected on farms, plots, and processors, offering API integration and manual data injection. Our solution ensures data accuracy and compliance, saving time and reducing risk.
KoltiVerify's Data Verification Process
Data Integration Our solution consolidates files from any supplier into a unified database, regardless of format or origin. Data is converted into a standardized format and injected into the system using API integration from any ERP system used by our client or through manual data injection by uploading the file.
Data Quality Verification We conduct rigorous checks for preliminary analysis, highlighting data anomalies and inaccuracies to maintain high data integrity. This includes ensuring the estimated annual production of each plot is realistic and that polygons do not overlap with other plots. This process examines geolocation data points and polygons of farm plots to meet deforestation compliance requirements, using advanced spatial analysis approaches to detect compliance through our Land Use Tracker feature on KoltiTrace MIS. Data is classified into compliance, indicative compliance, and non-compliance categories.
EUDR Analysis Report We produce a comprehensive verification report, including a list of poor-quality data and an analysis of each processor related to geolocation, land use rights, and legality, as well as other risks (environmental protection, forest-related regulations, human rights, tax, etc.). The report delves into supplier compliance and the deforestation potential of each plot. The Verification Report Dashboard, accessible via KoltiTrace MIS web, allows users to extract lists of poor-quality data per processor. Reports are tailor-made based on our verification and supported by our flagging system.
Risk Mitigation Efforts In the analysis report, we provide recommendations for each processor and highlight those with high-risk data inaccuracies for EUDR compliance. To help businesses with risk mitigation efforts for EUDR, we offer our extension service, KoltiSkills, for:
Third-Party Sample Verification: Our field team will engage with suppliers to follow up on the results and suggest future improvements.
Coordinate with Suppliers: Our field team conducts on-the-ground inspections and engages with suppliers.
By meticulously addressing these critical stages of data integration, quality verification, analysis, and risk mitigation, KoltiVerify stands out as an ideal solution for data verification in your EUDR compliance efforts. Our solutions provide a comprehensive approach to ensuring the integrity and accuracy of your supply chain data, enabling you to make informed decisions and effectively mitigate risks.
Why Partner with Us for EUDR Data Verification?
Robust Traceability Journey Towards EUDR Compliance Our solution offers comprehensive business solutions tailored to your needs, providing a range of options for clients to achieve full traceability and reduced risk of circumvention. This includes supply chain mapping, verifying supply chain linkages, segregation training, monitoring, and real-time transaction traceability.
Risk Mitigation We offer Risk Mitigation activities, such as producer training and coaching, and supporting producers in obtaining land legality through our extension service, KoltiSkills, to ensure businesses can comply with EUDR with less hassle.
Advanced Deforestation Risk Assessment Powered by high spatial and spectral resolution imagery, machine learning algorithms, and integration with openly audited forest cover resources, our solution delivers unparalleled accuracy and customization. We cross-reference geospatial data, including forest and non-forest areas from satellite imagery and tree cover loss data, with farm polygon data from KoltiTrace MIS FarmXtension for validation from field data collection.
Utilizing our solutions, your business can confidently navigate the challenges of EUDR compliance and demonstrate your commitment to sustainability. Talk to our expert today to learn more about how KoltiVerify can help your business.
Resources:
Weisse, M., & Goldman, E. (2021). Just 7 Commodities Replaced an Area of Forest Twice the Size of Germany Between 2001 and 2015. Retrieved from World Resources Institute: https://www.wri.org/insights/just-7-commodities-replaced-area-forest-twice-size-germany-between-2001-and-2015.
European Commission. (n.d.). Deforestation Regulation Implementation. Retrieved from European Commission: https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en.
About Writer:
Writer: Gusi Ayu Putri Chandrika Sari, Social Media Officer at Koltiva
Editor: Boby Hermawan, Head of Digital Marketing at Koltiva
Gusi Ayu Putri Chandrika Sari, serving as Koltiva's dedicated Social Media Officer, brings an impressive six-year track record in communications, bolstered by a profound enthusiasm for sustainability, technology, and agriculture. Her extensive experience in communications has honed her skills in crafting compelling narratives and engaging content across various digital platforms.
This is a comprehensive overview of the challenges businesses face in data verification with EUDR compliance.