EUDR Compliance Validation With Planet Satellite  Data

The EU’s new regulation for deforestation-free supply chains ensures that goods produced within or imported to the EU do not cause deforestation or forest degradation in their production. It was enacted in June 2023, with operational requirements to be detailed between 2024 and 2025, depending on the size of organization.

Deforestation and forest degradation are major drivers of climate change and biodiversity loss. The Food and Agriculture Organization (FAO) of the United Nations estimates that 420 million hectares of forest — an area larger than the EU — were lost to deforestation between 1990 and 2020. The Intergovernmental Panel on Climate Change estimates that 23% of total greenhouse gas emissions between 2007 and 2016 came from agriculture, forestry, and other land uses.

The law covers the seven major agricultural commodities primarily associated with deforestation and forest degradation globally. Consumer goods companies, operators and commodity traders will be responsible for conducting and reporting due diligence which include (amongst others): the geographical location of the plots of land where the commodities were produced, and “conclusive and verifiable” evidence that production did not lead to deforestation or degradation after 31st December 2020.

The EU will create “risk maps” – ranking countries and subnational jurisdictions according to deforestation risk. If a commodity operator, trader, or company is importing from a higher-risk region, they face a greater likelihood of a compliance check.

EU member country national institutions, also referred to as “national authorities,” will conduct compliance checks as a portion of their domestic production and international import each year and make this report available in April to the European Commission. This will depend on the deforestation risk category determined by the commission.

Commodity operators, traders, and consumer goods companies will need to do a number of things, including:

1. Disclose their sourcing areas, down to geo-coordinates of five hectare areas of production
2. Demonstrate due diligence that ensures production in this sourcing area did not cause deforestation or forest degradation after a cutoff date of December 31, 2020
3. Verify and evaluate risk of non-compliance

Requirements for small organizations are expected to be detailed in 2025. Not meeting either of the two requirements will result in a prohibition to make available products and services in the EU.

Companies will need to ensure accuracy of the geographic locations where key commodities are produced. Using geolocation information is a cost-effective way to prove compliance to authorities and ensure products are deforestation-free. Combining geolocational information with Earth observation and remote sensing data can scale these efforts, particularly over broad, dispersed production areas.

Earth observation technologies, such as satellites and remote sensing, can provide real-time or near-real-time data on land-cover changes, including deforestation and degradation. This can help verify compliance with deforestation-related regulations by tracking and documenting land-use changes and forest loss for compliance purposes.

Earth observation data can enhance transparency in supply chains by providing clear and objective information across broad areas of the globe about the origin and impact of products and commodities. This data can be used to hold companies accountable for their sourcing practices and to identify those contributing to deforestation and degradation. By analyzing historical land-use changes and predicting future trends, businesses can make informed decisions about sourcing and investments and avoid revenue risk.

The growing abundance of satellite data can make it challenging to understand how each contributes to sustainable supply chain management. Characteristics of satellite data like coverage, temporal frequency, spatial resolution, and spectral attributes can enhance businesses’ ability to provide sufficient, timely context across supply chains, but there are tradeoffs to understand. Comprehensive data at global scale is often required to understand supply chain provenance to the fullest effect and avoid the financial risks of EUDR.