EU Deforestation Regulation (EUDR): Compliance, Geolocation, and ESG Benefits Explained

Since June 29, 2023, the EU Deforestation Regulation (EUDR) requires companies to prove the origin of raw materials such as timber, cocoa, palm oil, and soy down to the production plot. The goal is to ensure deforestation-free supply chains and prevent forest destruction. This landmark regulation is a direct response to the EU’s commitment to halt global deforestation, which is responsible for nearly 11% of global greenhouse gas emissions, according to the European Commission (source).

Key Facts about the EUDR:

• Affected raw materials: Timber, cocoa, coffee, soy, palm oil, beef, rubber.
• Obligation: Proof of deforestation-free and legally compliant production.
• Penalties: Up to 4% of annual EU turnover for violations.
• Geolocation: Precise coordinates (6 decimal places) required for each production area.

Geolocation Methods:

• Mapping: For large areas.
• Coordinate entry: For precise points.
• GeoJSON format: Standard for geodata.

Requirements:

• Areas > 4 hectares: Polygon mapping.
• Areas ≤ 4 hectares: Single coordinates or polygon.
• Data must be stored for at least 5 years.

Benefits for Companies:

• Fulfillment of ESG goals.
• Strengthen stakeholder trust.
• Automated risk analysis using AI-powered satellite imagery.

The combination of satellite data, field surveying, and standardized data formats makes EUDR compliance possible.

Technical Standards for EUDR Geolocation

Required Data Accuracy and Format

The EUDR requires a geographic accuracy of at least six decimal places for latitude and longitude. This ensures that each production area can be uniquely identified, a level of precision that aligns with international best practices for traceability (Earthworm Foundation).

The requirements for production areas are as follows:

These specifications form the basis for further requirements regarding data formats and quality controls.

Data Formats and Quality Control

The EUDR system only accepts geodata in GeoJSON format, which must meet the following specifications:

• Latitude: -90 to +90 degrees
• Longitude: -180 to +180 degrees
• Polygons must not have overlapping lines

Compliance with these requirements is crucial to ensure conformity with EUDR standards. The use of standardized formats like GeoJSON also facilitates integration with digital platforms and reporting tools, streamlining compliance efforts (source).

Combining Satellite and Field Data

Satellite data plays a central role in monitoring deforestation and land use. Current analyses achieve an accuracy of ±5% to ±20%. The verification process combines the following steps:

• GPS-based field surveying: On-site data is matched with satellite imagery.
• Validation using historical data: Previous land use records provide additional assurance.
• Regular updates: Geodata is continuously kept up to date.

"Each coordinate must be recorded with at least six decimal places of accuracy for both latitude and longitude—a level of detail that ensures every production area can be precisely identified and verified." - Gilly Kinsky

The maximum size of geodata per due diligence statement is 25 MB, which corresponds to about 30,000 to 40,000 coordinate points.

Mapping Tools and Methods

Field Equipment and Options

For precise surveys that meet EUDR requirements, professional GNSS devices with RTK technology are indispensable. These devices deliver extremely accurate results, often to within a few centimeters. For less complex mapping tasks, mobile apps can be a practical solution. However, it is important to verify results on-site to ensure accuracy. The European GNSS Agency highlights the growing role of precision GNSS in agriculture and supply chain monitoring (source).

Satellite Analysis with AI

In addition to using precise field equipment, the use of modern, AI-based satellite analysis further increases efficiency. An impressive example comes from Lithuania: In June 2020, a customized ResUnet architecture was used to automatically detect plots using Sentinel-2 data (MDPI Remote Sensing). NASA has also demonstrated how AI can help monitor forests from space, enabling rapid detection of illegal deforestation and land use changes (NASA).

Benefits of AI-powered satellite analysis:

• Automatic identification of land use changes
• Continuous monitoring of large areas
• Reliable accuracy in deforestation analysis

Comparison: Field vs. Digital Mapping Methods

The right choice of mapping method depends on various factors. An overview:

The combination of field measurements and digital methods offers the perfect balance between precision and efficiency. Satellite images provide a comprehensive overview of large areas, while field measurements supply the necessary data for accurate validation to meet EUDR requirements. This seamless integration is a key building block for a reliable traceability system, which will be explained in more detail in the next section.

Building Plot Tracking Systems

4 Steps to Building a Tracking System

A well-organized tracking system is essential to meet EUDR requirements. Here are the key steps to consider during implementation:

1. Supplier Integration

From July 2024, an established Commercial Network enables comprehensive data collection along the entire supply chain. Through this network, geolocation data can be exchanged securely and efficiently. PwC notes that early supplier engagement is critical for smooth data flows and compliance (source).

2. Data Validation

For plots larger than 4 hectares, precise polygons are required to accurately map the area. Smaller plots, on the other hand, can be documented with a single coordinate point. It is important that all data is provided in standardized formats.

3. Risk Analysis

An outstanding example of thorough risk analysis is provided by Olam Food Ingredients: The company monitors deforestation and land use changes at over 800,000 farms in 40 countries, leveraging geospatial data and AI to proactively address risks and ensure compliance (source).

4. System Integration

The collected data must be integrated into existing company systems. It is essential to ensure data security in accordance with SOC2 standards.

Integration with ERP Systems

After setting up the tracking system, integrating it into existing ERP systems is the next step. This connection ensures that EUDR requirements can be implemented smoothly:

Future-Proofing the System

To ensure the long-term success of the tracking system, continuous improvements and adjustments are essential. Key measures include:

Data Management and Retention

• Relevant information must be retained for at least five years, accompanied by regular system audits.
• A reliable framework for data validation should be implemented.

Technological Adaptability

Integrating various data sources achieves an optimal balance between precision and cost efficiency. Advanced technologies, such as AI-powered satellite monitoring, help ensure long-term regulatory compliance.

Such a tracking system not only forms the basis for EUDR compliance but also sustainably supports the achievement of ESG goals.

EU Deforestation Regulation – What Affected Companies Should Do Now

Using Location Data for ESG Goals

Integrating ESG aspects into traceability gives tracking systems strategic significance. By leveraging geolocation data, companies can not only comply with EUDR but also demonstrate their commitment to sustainable, ethical, and transparent supply chains—an increasingly important factor for investors and consumers alike (Earthworm Foundation).

Meeting ESG and EUDR Requirements

Geolocation data plays a central role in achieving ESG goals by creating transparency and strengthening stakeholder trust. It also forms the basis for detailed life cycle analysis. According to the CDP, robust traceability is essential for companies aiming to meet both regulatory and voluntary sustainability targets.

Location Data in Life Cycle Analysis

Location data enables a more accurate assessment of environmental impacts throughout the entire supply chain. The accuracy of satellite assessments ranges between ±5% and ±20%. Digital solutions automatically perform key analyses, such as:

• Verification of activity data
• Monitoring compliance with protected area boundaries
• Assessment of deforestation risks

These automated processes can be seamlessly integrated into the strategic evaluation of environmental impacts, supporting both compliance and sustainability reporting (CDP).

Strengthening Stakeholder Trust

Accurate recording and documentation of location data significantly helps build trust among all parties involved. Smallholders in particular benefit through:

• Training on correct data collection
• Investments in technical infrastructure
• Support in meeting EUDR requirements

These measures promote sustainable production processes and build trust throughout the supply chain. According to the Forest Trends Initiative, supporting smallholders is crucial for inclusive and effective EUDR implementation.

Conclusion: Next Steps to EUDR Compliance

To meet EUDR requirements, precise geodata and standardized processes are essential. Here’s a compact overview of the key requirements:

Based on these requirements, companies should implement the following steps to both meet EUDR standards and optimize their internal processes:

• Standardized Data Collection
  Uniform processes and clear validations ensure consistent location data. Using formats like GeoJSON also makes integration into existing systems easier.
• Technological Support
  The use of geodata in combination with AI-powered satellite analysis enables precise and continuous monitoring of areas. This way, changes in land use or potential risks can be identified early.
• Active Supplier Involvement
  Close collaboration with suppliers is crucial. Training and technical support help ensure geodata quality and simplify data exchange.

These steps are not only the key to EUDR compliance, but also help strengthen and implement your company’s ESG goals in the long term.

FAQs

How can companies ensure their geolocation data meets the requirements of the EU Deforestation Regulation?

How companies can meet the requirements of the EU Deforestation Regulation (EUDR)

To comply with the EU Deforestation Regulation (EUDR), companies must collect and provide precise geodata for their production areas. Different requirements apply depending on the size of the area:

• Areas over 4 hectares: Here, polygons must be provided to accurately define the area.
• Smaller areas or livestock farms: For these, a single coordinate point is sufficient.

This geodata is an essential part of due diligence statements and must be kept for at least five years. By complying with these regulations, companies can not only increase transparency in their supply chain but also significantly reduce the risk of EUDR violations. For more details, see the official EU guidance.

How do AI-powered satellite analyses support the monitoring of deforestation and land use?

AI-powered satellite analysis: Precision in monitoring

With AI-powered technology, deforestation and land use changes can be monitored quickly and accurately. By using modern algorithms, satellite images are analyzed to detect potential risks such as illegal logging or encroachment on protected areas. NASA’s research highlights that AI can process vast amounts of satellite data in near real-time, enabling authorities and companies to respond rapidly to emerging threats (NASA). This technology not only increases the efficiency of monitoring but also supports the documentation required for EUDR compliance.

What steps are required to implement a parcel tracking system in accordance with the EU Deforestation Regulation?

How to implement an effective parcel tracking system

To establish a reliable parcel tracking system, companies should consider several important steps:

• Collect data: Gather precise information on the geographical location and use of the parcels. This data forms the basis for all further measures.
• Analyse risks: Carry out assessments to identify potential issues such as deforestation or inappropriate land use. This helps to pinpoint particularly critical areas.
• Take risk mitigation measures: Develop strategies to minimise identified risks and implement them consistently. This also helps ensure compliance with legal requirements.

A carefully planned tracking system not only supports compliance with the EU Deforestation Regulation but also increases supply chain transparency and strengthens your ESG objectives.