Why supply chain traceability is a strategic issue for companies importing forest-risk commodities
The European Union has introduced a new regulation—the EUDR (Deforestation-free Products Regulation)—which sets strict criteria to ensure that products placed on the market are not linked to deforestation. This article explains what supply chain traceability is, why it’s essential to address new legal requirements, and how Etifor can help companies turn this obligation into an opportunity for innovation and competitiveness—thanks to the EMMA approach.
What is supply chain traceability?
Supply chain traceability refers to the ability to reconstruct and monitor the journey of a commodity or product through all stages of the supply chain: from production of raw materials to processing stages, distribution, and consumption. This system allows the identification of raw material origins and the actors involved.
How does supply chain traceability work?
A traceability system relies on collecting and managing data from every step of the supply chain. Companies can use more basic internal traceability systems or, in more complex scenarios, adopt specialized software to ensure data transparency and immutability.
An effective traceability system should include reliable data to answer key questions such as:
- Where do the raw materials come from?
- What processing steps have they undergone and where did they happen?
- Who handled the product at each step?
- Were any other products added to it during the process?
What is the EUDR: the regulation for deforestation-free supply chains
The Deforestation-free Products Regulation (EUDR) prohibits placing on the EU market any products associated with deforestation, forest degradation, or illegalities in the country of production. It applies to seven commodities: cocoa, coffee, palm oil, soy, wood, rubber, and cattle (beef or leather).
For each of these products, companies must ensure full traceability down to the production plot and demonstrate that production not only did not cause deforestation after December 31, 2020, or degradation in the case of wood products, but also was legal in terms of land use rights, human rights, environmental protection, and other legislation areas identified in the Regulation.
Why supply chain traceability is Crucial to Comply with the EUDR
Supply chain traceability is essential for proving compliance with the EUDR. Without a transparent and reliable data collection system, it becomes impossible to verify that a product is not linked to deforestation, degradation, or illegalities relevant to this regulation.
Failing to meet regulatory requirements can lead to serious consequences, including:
- Fines proportional to the environmental damage and the value of non-compliant products
- Confiscation of products or revenues concerned
- Temporary exclusion from public procurement processes and access to public funding
- Temporary exclusion from the EU market
- Reputational damage that could impact client and stakeholder relationships
In a context increasingly focused on sustainability and legality, investing in supply chain traceability and reliable systems is not just a strategic decision—it’s a prerequisite for responsible and long-term operations.
Etifor supports companies with the EMMA Method
Complying with the EUDR requires expertise, tools, and a solid understanding of both regulatory and operational contexts. Etifor supports companies with tailored EUDR training services: from introductory courses on regulation principles to advanced modules on traceability, due diligence, and compliance tools. The training is designed to be immediately applicable and effective at every stage of the compliance journey.
Alongside training, Etifor offers a strategic approach through the EMMA approach. EMMA (Explore & understand, Map & assess, Mitigate & monitor, Advance & anticipate) is the approach designed by Etifor to support companies in developing strategies to facilitate their transition to zero deforestation and regenerative supply chains. It begins with a comprehensive gap analysis, training, mapping, tracing, assessing, mitigating, and monitoring potential deforestation and legality risks within their supply chains, allowing for compliance with emerging deforestation-free regulatory and market requirements. At a later stage, EMMA guides companies in going beyond compliance by mitigating their negative impacts on nature, enhancing positive ones, and moving toward a Nature Positive path.
Whether you’re aiming to build a deforestation-free supply chain, implement a traceability system, or meet client and stakeholder demands for sustainability, Etifor provides the expertise and operational tools to make compliance a genuine opportunity for growth.