UK Forest Risk Commodity Regulation (UKFRC) and EU Deforestation Regulation (EUDR): Frequently Asked Questions (FAQs)

In 2021, the Department for Environment, Food and Rural Affairs (Defra) announced that provisions under the Environment Act would introduce a due diligence requirement on certain forest risk commodities.

This would prohibit larger companies from using agricultural commodities that have not been produced in line with local laws in the countries where they originate. This followed two government consultations in both 2020 and 2021.

After a pause in implementing the legislation, Defra has now signaled its intent to do this before the next UK General Election.

Defra has confirmed that the following products will be in scope:

• Non-dairy cattle products (beef and leather)
• Cocoa
• Palm
• Soya

Dairy products will be separately in scope where they are derived from animals fed on a diet that contains a forest risk commodity, such as soya or palm kernal expeller.

Raw or primary forest risk commodities and all products derived from these commodities will be regulated. This includes products that may currently be considered as "waste products" or "by-products":

• Soy hulls
• Palm Kernel Expeller
• Hides from a bovine animal

Organisations using these commodities in UK supply chains with a global turnover of over £50 million are in scope of the UKFRC regulation.

Organisations whose use of the regulated commodities does not exceed the annual volume threshold of 500 tonnes may submit an exemption.

AIC has had regular contact with the Defra teams which are working on this UKFRC regulation.

Engagement to date has included AIC participating in workshops and feeding in to consultation exercises, as well as holding constructive one-to-one meetings with policymakers.

Defra has indicated that there will be the need for continued engagement with industry representatives to help with drafting the guidance which will accompany the legislation.

The laying date was expected to be by the end of May. Given that the draft secondary legislation had not successfully passed through Parliament prior to the announcement of a General Election, it is not possible to say when the legislation will progress.

It is important to point out that the legislation may change under a new Government.

Given that the draft secondary legislation had not successfully passed through Parliament prior to the announcement of a General Election, it is not possible to say when the legislation will come into force.

It is important to point out that the details of the legislation may change under a new Government which might include any transition period.

Defra has committed to providing comprehensive guidance on the type and scope of evidence that businesses in scope will be expected to provide in its annual compliance reports.

It is not yet clear whether this guidance will be published at the same time that the secondary legislation is laid.

The UKFRC regulation is not a ban on importing forest risk commodities in scope.

It will require businesses in scope to submit an annual compliance report that products in scope - soya, palm and their derivatives (e.g. co-products) - have been produced in accordance with local laws.

Given this, AIC does not see any immediate impact on availability of certain commodities as a result of the implementation of UKFRC.

As drafted, businesses based in Northern Ireland will have to comply with both UK and EU legislation.

AIC is aware that the UK Government and the EU Commission are still discussing the details of implementation.

The table below succinctly sets out the key differences in scope between UKFRC and EUDR.

Agri-supply businesses in scope will be required perform due diligence to make a judgement on forest-risk commodity sourcing and the integrity of their supply chain.

They will need to map their supply chain and assess the risk of illegality, creating a risk management plan. This plan will need to be actioned in order to mitigate identified risks to a level as low as reasonably practicable.

Businesses will need to submit an annual report on this due diligence activity. Defra have stated that information that must be included will be detailed in published guidance.

AIC is planning to develop a voluntary standard requiring Participants to demonstrate to auditors that the commodities they "use" have been produced on land that is legally occupied or used.

The standard could be used for a range of in-scope commodities, such as soyabean meal, palm oil and derived products.

The standard would be of value to AIC Members to help them demonstrate compliance with UK FRC regulation.

Under the EU Deforestation Regulation (EUDR), any operator or trader who places commodities - such as soya, beef, palm oil, wood, cocoa, coffee, rubber - on the EU market, or exports from it, must be able to prove that the products do not originate from recently deforested land or have contributed to forest degradation.

Relevant goods must also be covered by a due diligence statement and be produced in accordance with applicable local laws.

EUDR was introduced in June 2023. As of 30 December 2024, the key articles of the EUDR will apply, leaving a short adaptation and preparation period. 

The regulation (2023/1115) can be found on the European Commission website.

Prior to placing relevant commodities on the EU market, agri-supply businesses must carry out mandatory due diligence to ensure these products are deforestation-free and legally produced (based on a cut-off date of 31 December 2020).

Critically, companies must provide geo-location co-ordinates for commodities providing traceability and evidence that they have not been produced on recently deforested land. 

AIC is an active member of the European feed industry federation FEFAC, and is engaged with a number of FEFAC group working on EUDR.

FEFAC has joined forces with the European association of trade in cereals, oilseeds, rice, pulses, olive oil, oils and fats, animal feed and agrisupply - COCERAL - and FEDIOL, the European vegetable oil and proteinmeal industry association, to represent the combined interests of the agri-supply sector with the various EU decision making bodies.

At the Commission AGRIFISH Council meeting held on 26 March 2024, the Austrian delegation presented a paper.

This identified a conflict of interest between EUDR and the promotion of extensive farming practices in the EU, an increase in the administrative burden in developing a new system for the traceability of cattle, and a lack of confidence in the information system the EU is building to manage the geolocation data.

To address these points, the Austrian paper called for: 

• An extension of the implementation period; 
• A reduction of the administrative burden; 
• A general exemption for producers of relevant commodities in low-risk countries; 
• In general: reduce the number of certificates in the EU.

Out of 27 EU member states, 20 agricultural ministers supported the Austrian position and requested the Commission look at how to mitigate the undesired effects of EUDR.

At the beginning of May, EU Farm Commissioner Wojciechowski wrote to European Commission President Ursula von der Leyen on EUDR implementation challenges, calling for deferral of date of entry of the EUDR.

To date, there has been no official response from the Commission who continue to state that the full implementation date will remain at 1 January 2025. 

The EU Commission has committed to the publication of an updated question and answer document by June 2024, which is expected to include information on the legality framework.

Further guidance documents may not be available until later in 2024.

There is concern that the lack of clarity over EUDR is affecting the market for soyabean meal, particularly for contracts from January 2025 onwards, and it is true that for EUDR, many uncertainties remain.

European trade association FEFAC, of which AIC is a member, has written to David Clarinval, EU farm minister, expressing concern at the impact of EUDR uncertainty on feed security.

FEFAC calls on the EU Council to focus on delivery of a functional IT system as a matter of urgency and to consider phasing in traceability requirements over a period of time.

FEFAC also recommends making use of existing traceability tools, such as the FEFAC Soy Sourcing Guidelines, as part of this transition.

Visit the FEFAC website for more detail.

There is no doubt that whilst EUDR will not be implemented in Great Britain (it will apply in Northern Ireland), similar impacts to those seen in EU will be seen in UK.

AIC would recommend feed compounders remain in regular contact with their soya suppliers. AIC will provide further clarity on EUDR as soon as this becomes available.