The EU's deforestation regulation (EUDR) poses challenges for Thailand's rubber industry, but it also opens doors to new opportunities. By adhering to the regulation, the sector can position itself for sustainable growth and greater market access. Although initial adjustments may impact the operations, the long-term benefits of compliance are significant.
Thailand stands as a pivotal force in the global rubber market, solidifying its position as the European Union's (EU) second-largest supplier of rubber products, following China, according to a recent Krungsri Research publication (The Research Institute of the Bank of Krungsri Ayudhya). With rubber goods comprising 90% of its exports to the EU, Thailand demonstrates a robust commitment to sustainable practices, especially in the rubber industry (Rijksoverheid: 2024).
The enforcement of the EUDR will serve as a crucial catalyst, driving stakeholders to swiftly adapt and comply. The regulation mandates that products must not be sourced from deforested or degraded land, requiring businesses to conduct thorough due diligence to ensure adherence. This policy enforces responsible sourcing and sustainable land use, presenting both challenges and opportunities for industries like rubber in Thailand.
Since the regulation took effect on June 29, 2023, it has raised substantial concerns within Thailand's rubber industry. In response, the government, the Rubber Authority of Thailand (RAOT), and key industry stakeholders have initiated comprehensive efforts to meet the new requirements while aiming to leverage Thailand's rubber market potential in the EU. The research underscores Thailand's well-organized rubber sector, which is proactively aligned with the European Union Deforestation Regulation (EUDR). Comprehensive laws and regulations are in place to protect forests, monitor land ownership, and trace the origins of rubber—a practice in which Thailand excels. Additionally, up to 90% of rubber producers are registered with the Rubber Authority of Thailand (RAOT), a state enterprise under the Thai Ministry of Agriculture and Cooperatives, ensuring they receive legal certification for their products (Rijksoverheid: 2024).
Six months before its full enforcement, the rubber industry's early adoption of EUDR-compliant solutions began to have significant results. According to Pattaya Mail, the Rubber Authority of Thailand (RAOT) announced that Thai rubber prices have reached a 12-year high due to successful auctions of EUDR-compliant rubber through the Thai Rubber Trade (TRT) system. (Pattaya Mail: 2024). The RAOT highlighted that the strong demand for EUDR-compliant rubber has driven prices for rubber sheets up to 96.66 baht per kilogram, the highest in over a decade (Pattaya Mail, 2024). The RAOT is also urging rubber producers to embrace sustainable and eco-friendly farming practices to meet the EUDR and international standards. Additionally, the TRT system enhances data collection and traceability of rubber origins.
According to the European Forest Institute in their recent brief published in July 2024 (EFI, 2024), Thailand's concerted efforts to help EU operators comply with the EUDR while also addressing potential challenges for its producers, traders, and processors revolves around the following strategy:
Mapping the Production of Natural Rubber
Thailand's National Rubber Committee has classified rubber plantations into two types: original rubber plantation areas and newly opened rubber plantation areas. The original plantation areas, located in the Southern and Eastern regions, account for 64% of rubber cultivation, mostly on former fruit-growing land. Meanwhile, the newly opened plantation areas, covering 36% of the cultivation area, are in 60 provinces, primarily on former cassava, sugar cane fields, and logged-over forests.
A crucial initiative by the Rubber Authority of Thailand (RAOT) to support the EUDR's implementation involves comprehensive mapping of production areas. To date, RAOT has successfully mapped over 3.1 million hectares of rubber plantations, representing 79% of the country's total rubber cultivation area. This effort includes gathering geolocation data on 1.98 million rubber plots, all of which are stored in a central database.
RAOT's system allows for the comparison of mapped rubber plantation areas with protected and forest areas. Through this approach, RAOT aims to pinpoint rubber production zones, geolocate individual plots, and provide verifiable evidence that rubber production is free from deforestation. The use of a forest cover map, aligned with EUDR and FAO definitions, will be essential in proving that rubber exported to the EU has not contributed to deforestation since the EUDR's cut-off date of December 31, 2020 (EFI: 2024).
Registering Smallholder Rubber Producers
One of the challenges of the EUDR implementation is that it risks excluding producers from the market. However, Thailand is stepping up to protect its producers in the supply chain from this risk through producer registration. As of March 2024, RAOT has registered over 1.6 million producers, 958 groups, and rubber processing entities, collecting information on producers, geolocation data of plots, and product details. A major challenge is land tenure, as many households lack land titles, which are required for RAOT registration, particularly in newly opened areas (EFI: 2024). This is one of the measures taken to protect the producers.
Maintaining Traceability in the Natural Rubber Supply Chain
Mapping and registration efforts are crucial for EUDR compliance, requiring geolocation and legality information to be passed along the supply chain. This means including traders in systems is also essential due to the complex and often informal nature of the supply chain. If done properly, these efforts ensure smallholder inclusion, prevent trade disruptions, and guarantee compliance with applicable laws and regulations. Thailand's initiatives in mapping and registering rubber plantations, particularly in national reserved forests, are crucial for ensuring that only legally compliant rubber products reach international markets.
Capacity Building
Implementing a mapping and registration system requires extensive capacity building for producers, traders, and processors. To strengthen national capacity, RAOT engages extension officers who support farmers, traders, and processors across Thailand. These officers play a role in validating data within RAOT's registration systems. RAOT is also developing targeted training programs for this purpose. Additionally, a centralized information-sharing platform is being created to inform operators about the legality and geolocation of rubber for the EU market while raising awareness among Thai stakeholders about the new market requirements under the EUDR.
A Modular Approach to Addressing Rubber Supply Chain Traceability and Capacity Building Needs for EUDR Compliance
Learning from Thailand's experience, it is crucial to address the challenges within supply chains to adhere to the EUDR, which simultaneously opens new opportunities for businesses. In Thailand's rubber sector, we have supported our clients across more than 60 provinces—spanning the Southern, Central, Eastern, Northeastern, and Northern regions—with over 38,000 producers registered and more than 100,000 farm plots and production areas verified, aligning a significant portion of the industry with the stringent standards set by the EUDR.
Our EUDR solutions assist businesses through a modular approach based on our KoltiTrace Management Information System (MIS). This robust producer mapping and traceability platform provides a scalable solution for independent suppliers to comply with the upcoming EUDR regulations. Our extension services, KoltiSkills, offer comprehensive solutions for capacity building, ensuring that all stakeholders are well-equipped to meet compliance requirements. KoltiVerify, part of our modular approach to EUDR compliance, integrates the entire supply chain on one platform. It verifies supplier and processor bases, ensuring compliance by checking field data from farms, plots, and processors. With API integration and direct data entry options, KoltiVerify guarantees data accuracy, saves time, and reduces risk.
Here's how our solutions can help your business navigate the challenges effectively.
Supply Chain Mapping & Verification
We conduct comprehensive rubber producer surveys to map product origins, verify rubber farm production practices, and assess emissions, ensuring compliance with sustainability standards and evolving regulations like the European Union Deforestation Regulation (EUDR). Our field agents collaborate closely with processors and suppliers to map smallholders within their supply chains. Using the KoltiTrace application, we carry out in-depth farm and risk assessments, providing a thorough understanding of potential agricultural risks.
In Thailand, Yotsawadee Luetrakulset, our Program Manager, is working with clients to ensure all smallholders are accurately mapped and assessed. In one of our rubber projects in Thailand, we are dedicated to supporting the rubber client through a comprehensive approach. We conduct user training and prepare for field team recruitment, ensuring that our project management team is well-equipped to map 11,000 plots effectively. Operationally, we support the recruitment of additional Cluster Leaders (CL) and Field Agents (FA) to ensure the successful execution of the project. We are also recruiting additional Project Leads (PL), Reporting Team members, as well as HR and Product Managers for Thailand, meeting both sustainability and compliance goals.
"During the mapping process, our Field Agents and Cluster Leaders work closely with local dealers and aggregators to chart smallholders within their supply chains. This information we gathered will be valuable in developing in-depth farm and risk assessments for each producer and in implementing a comprehensive risk mitigation strategy, as required by the EUDR," said Yotsawadee. These efforts are key to ensuring compliance with EUDR, reducing deforestation risks, and promoting responsible sourcing within the rubber supply chain in Thailand.
Training & Coaching
In one of our rubber projects in Thailand, we conduct user training and prepare for field team recruitment, ensuring that our project management team is well-equipped to map plots effectively.
We offer Risk Mitigation activities, such as producer training and coaching, and supporting producers in obtaining land legality. We use data insights to tailor interventions addressing producers' challenges. "Our training and coaching efforts in Thailand raise awareness of sustainable practices among rubber producers. This training and coaching will be a key component of our upcoming risk mitigation plans," said Yotsawadee. This aligns with Thailand's efforts in capacity building for producers. It will help them to enhance their understanding of sustainable practices, improve compliance with international standards, and strengthen their ability to meet the requirements set by the EUDR.
Business Support, Land Legality, & Certification Preparation
Our approach emphasizes engagement and capacity building for all supply chain actors, including local aggregators, cooperatives, and agricultural input suppliers. Our Field Agent (FA) also collaborates closely with local governments to help rubber producers obtain the necessary legal compliance documents and prepare for certification under voluntary standards. This combined support ensures that producers meet EUDR requirements and can access broader markets.
Our solutions demonstrate how we assist Thai clients in achieving EUDR compliance while enhancing their global market standing. Talk to our expert today to discover how our modular approach can benefit your business!
Resources
Rijksoverheid. (2024). Thailand advances deforestation-free agri-food system amid EUDR implementation. Retrieved from https://magazines.rijksoverheid.nl/lnv/agrospecials/2024/02/thailand
Pattaya Mail. (2024). Thai rubber prices achieve record high in 12 years through EUDR. Retrieved from https://www.pattayamail.com/thailandnews/thai-rubber-prices-achieve-record-high-in-12-years-through-eudr-461997
European Forest Institute (2024). New brief released: Thailand’s natural rubber industry’s response to EU deforestation regulation. EFI. Retrieved from https://efi.int/news/new-brief-released-thailands-natural-rubber-industrys-response-eu-deforestation-regulation
European Forest Institute (EFI). (2024). Thailand’s natural rubber producers are preparing for new market requirements. EFI. Retrieved from https://efi.int/sites/default/files/files/publication-bank/2024/Briefing%20-%20Thailand%E2%80%99s%20natural%20rubber%20producers%20are%20preparing%20for%20new%20market%20requirements.pdf
Writer: Kumara Anggita, Content Writer
Contributor: Yotsawadee Luetrakulset, Program Manager
Editor: Daniel Prasetyo, Head of Public Relations and Corporate Communications
About the Writer
Kumara Anggita, serving as Koltiva's dedicated Content Writer, brings a wealth of experience from her six-year tenure in journalism in the fields of humanities and lifestyle, as well as her role as a writer in the tech industry. Her deep-rooted passion for gender equality and sustainability spurred her to enhance her reporting and storytelling skills through the EmPower Media Bootcamp by UN Women. Now, Kumara utilizes her platform to advocate for sustainable practices and gender equality through her compelling writing.
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