EUDR: A shifting landscape for soy
RTRS International Conference 2024 | Session 1
At the RTRS International Conference 2024, experts from across the globe came together to examine the challenges and opportunities posed by the EUDR. From the implications for sustainability reporting to the alignment of global supply chains, this session highlighted the crucial role of both regulatory frameworks and voluntary standards in achieving deforestation-free soy.
The European Union Deforestation Regulation (EUDR), which aims to reduce global deforestation linked to commodity supply chains, including soy, palm oil, beef, coffee, and cocoa, has experienced a delay. The Council reached a provisional agreement with the European Parliament on a proposed targeted amendment of the EUDR, postponing its date of application by 12 months.
The new legislation is a key part of the EU’s Green Deal and has been developed to directly address the impact of European supply chains on forest areas. The UN Food and Agriculture Organization (FAO) estimates that 420 million hectares of forest — an area larger than the EU — were lost to deforestation between 1990 and 2020. EU consumption represents around 10% of the global deforestation with palm oil and soya accounting for more than two-thirds of this.
For the global soy sector, a critical participant in these supply chains, the ripple effects of this delay were front and centre at the RTRS 2024 International Conference, held on November 19th and 20th in Ghent, Belgium. Session 1, ‘The Emerging Regulatory Landscape for Soy’, brought together experts and stakeholders to explore how the industry is adapting and thriving amidst tightening regulations.
Understanding the EUDR
This regulation demands rigorous traceability and transparency from companies, mandating due diligence to confirm their products are sourced sustainably and free from deforestation. Initially slated to take effect in 2024, EUDR has been delayed by 12 months to provide more time for businesses to prepare for and align with the complex requirements.
While this delay gives everyone in the soy value chain some breathing room, it also underscores the challenges of implementing such far-reaching legislation. As session moderator Melanie Faithfull Kent, CEO of Team Farner, succinctly put it, “The difference between compliance and conviction is what we’re exploring. How will companies use this extra year to prepare, and will they act with the urgency and conviction the situation demands?”
Melanie also emphasized that this is a pivotal moment not only for companies but for society as a whole: “As consumers, we have to recognize that the costs of our choices, whether for the environment or the producers, are real. It’s time for all of us to adopt a more sustainable approach that reflects the true cost of what we buy.”
Setting the stage: a call for decisive action
Kicking off the panel discussion, Antonie Fountain, Director of Voice Network, set a clear and assertive tone for the session. Drawing from decades of experience in sectors like coffee and cocoa, Fountain highlighted the importance of moving beyond voluntary initiatives to embrace binding commitments. “For years, voluntary efforts have laid the groundwork, but we need to scale up impact. It’s time to make these commitments actionable and measurable,” he emphasized.
Fountain highlighted the importance of moving beyond good intentions, stressing the critical need for regulations such as the EU Deforestation Regulation (EUDR). “The EUDR is a turning point. The new regulations require a more strategic and collective approach from companies. This is the time for them to come together and take an active role in transforming the sector, aligning with both market and societal expectations for sustainability,” he added.
Fountain’s message was clear: companies will need to be more accountable in their sustainability practices. “With these regulations in place, companies will need to report their actions regularly and with reliability. This shift is not just about compliance; it’s about truly reflecting the commitment to sustainability,” he concluded.
Fountain also highlighted the interconnectedness of the EUDR with other EU initiatives, such as the Corporate Sustainability Reporting Directive (CSRD). This began its phased implementation in 2024 and will extend to small and medium-sized enterprises (SMEs) listed on stock exchanges by 2027, and the Green Claims Directive. The CSRD requires companies to disclose detailed information about their environmental and social impacts, while the Green Claims Directive aims to combat greenwashing by standardising sustainability claims. These regulations collectively raise the bar for accountability, demanding substantive action from businesses.
Transparency and double materiality
Expanding on the role of CSRD, Bernhard Frey, Senior Sustainability Reporting Technical Manager at EFRAG, underlined the critical need for relevant and comparable sustainability reporting. “This should not be a box-ticking exercise,” Frey noted. “Companies should use this as a tool for change, producing decision-useful information for a wide range of audiences.”
He introduced the concept of ‘double materiality’, where businesses assess not only their environmental and social impacts but also the risks sustainability issues pose to their business and, for instance, their financial performance. “If a company consumes water, that can affect water availability and impact the environment and local communities. At the same time, the company’s own operations could be affected, for instance, by future water shortages in that same location or by more stringent regulation, which presents risks to the company. Impacts and risks are often inherently connected,” Frey explained. He recommended that companies conduct robust materiality assessments and highlighted the need to evaluate both upstream and downstream impacts, risks and opportunities within their supply chains.
The UK’s approach: alignment and uncertainty
Bringing a UK perspective, Duncan Brack, an independent researcher and Tropical Forest Alliance advisor, discussed the parallels and divergences between the UK’s regulatory approach and the EUDR. “We have our own version of EUDR in the UK, which is in some ways more wide-ranging and in some ways more narrow. But the details remain unclear,” Brack said, referencing delays in the UK’s implementation of deforestation-related provisions in its Environment Act.
Most UK companies, he noted, favour alignment with the EUDR to reduce trade friction. However, political uncertainty, including delays caused by the recent election, has left the UK’s regulatory landscape in limbo. “The secondary legislation covering commodities like soy was brought forward but stalled before parliamentary approval,” Brack explained. “The industry is still waiting for clarity.”
One bright spot in the UK context is the Soy Manifesto, an industry-led initiative advocating for deforestation-free soy. Brack highlighted the importance of such voluntary efforts in complementing regulatory measures, particularly in the absence of finalised legislation.
China’s development-driven approach
Wei Si, Dean of the College of Economics and Management at China Agricultural University, brought a global dimension to the panel by discussing the implications of these regulatory shifts for China, one of the world’s largest soy importers and producers. Wei explained that China’s approach to agriculture is closely tied to its broader developmental goals.
“As a country whose agricultural system is shifting from addressing hunger to addressing over-nutrition, our strategies for sustainable agriculture are intertwined with our broader developmental goals,” Wei said. He emphasised that China is actively revising its agricultural methods to align with sustainability while ensuring economic growth.
This perspective highlights the interconnected nature of global soy markets, where regulations in one region inevitably influence practices in others. As China works to balance its development goals with environmental stewardship, the EUDR may serve as a catalyst for broader change in global agricultural practices.
Harmonising regulations and voluntary standards
Karin Kreider, Executive Director of ISEAL, focused on the intersection of regulation and voluntary standards. While recognizing the transformative potential of the EUDR, Kreider stressed that voluntary certification systems like RTRS still have a critical role to play.
“We see the coming decade as being really critical in terms of regulation. It takes time to embed regulation in our markets and supply chains,” Kreider said. “Voluntary systems have the tools and approaches that can help companies meet these regulations while continuing to drive broader change.”
Kreider also cautioned against companies working only to meet the bare minimum required for compliance without addressing deeper sustainability challenges. “How do we ensure that joint efforts for better practices don’t get forgotten in the race for compliance?” she asked.
Industry challenges and opportunities
During the audience Q&A, attendees raised critical questions about the EUDR’s impact on producers and supply chain costs. One participant questioned whether soy segregation, as required by the EU, is feasible and who would bear the associated costs, suggesting potential inflationary impacts. Fountain emphasized the importance of a collaborative approach to ensure that these costs are shared equitably across consumers, producers, and the environment, without disproportionately burdening any single group.
Another audience member asked how the industry should use the extra year afforded by the EUDR delay. Duncan Brack highlighted the need to improve due diligence systems, as many challenges were identified during pilot testing, and to prepare stakeholders (companies, governments) to agree on shared traceability standards and best practices.
Meanwhile, Karin Kreider stressed the importance of maintaining high standards during this period to avoid a “race to the bottom,” where efforts to reduce costs or streamline processes could undermine sustainability goals and erode credibility: “Voluntary Sustainability Standards (VSS) have been at the forefront of driving sustainability for decades. As regulations reshape the landscape, the value of these systems lies in their ability to innovate, collaborate, and build expertise across the supply chain. By working together, voluntary standards and regulations can catalyze meaningful, lasting impacts for people, businesses, and the planet.”
RTRS and an aligned standard for EUDR
Amid challenges and uncertainties, the conference highlighted how RTRS is proactively preparing its stakeholders for the evolving regulatory landscape. At this year’s event, RTRS introduced the Chain of Custody Standard and the new module, ‘Optional Model IV: Requirements for Alignment with the EUDR’, designed to help companies meet the due diligence requirements of the EUDR.
The development of Optional Model IV, which offers two options — EUDR RTRS Segregation and EUDR RTRS Mix — addresses the EUDR’s due diligence requirements, equipping companies with tools to meet international market compliance demands while supporting sustainability by incorporating RTRS volumes. RTRS certification provides a solution by documenting the origin of certified soy and tracking it through facilities certified under the RTRS Chain of Custody.
As the session concluded, the panelists left the audience with a clear message: while the road ahead may be complex, the EUDR offers an opportunity to align economic activities with environmental sustainability. By leveraging this regulation as a catalyst for change, the soy sector can play a critical role in protecting the planet’s forests and ecosystems. However, it is not only the mandatory compliance that will drive this transformation. Voluntary initiatives, such as the RTRS certification, continue to play a pivotal role in raising sustainability standards and fostering industry-wide collaboration, ensuring that progress goes beyond the letter of the law to create lasting positive impact.
