Frequently Asked Questions

It is a European Union law that came into force in June 2023 to ensure that certain products consumed by citizens of the 27 EU member countries do not contribute to deforestation or forest degradation worldwide.

Cattle, cocoa, coffee, palm oil, soy, rubber and wood, and certain products derived from them. From 2025, new products may be included in the marketing rules imposed by the EUDR.

From 2024-12-30, coffee can only be placed and marketed on EU territory if:

(i) Not produced in a deforested area after 2020-12-31;
(ii) It has been produced in accordance with the applicable legislation of the country of production; and
(iii) It is covered by a declaration of due diligence, signed and made available on a European electronic system by the importer, including the geolocations of all the producing areas of the exported coffee bean.

Forest suppression for agricultural land use only. Forests are defined as areas greater than or equal to 0.5 ha, trees with a height equal to or greater than 5 meters (currently or potentially) and crown cover equal to or greater than 10% (currently or potentially), excluding land with predominantly agricultural or urban use. However, the EUDR is expected to be reviewed as of June 2024 to assess the feasibility of expanding the scope of “forests” to include other tree areas, such as areas with Cerrado vegetation.

(i) land use rights; (ii) environmental protection; (iii) forest-related rules, including forest management, biodiversity and conservation, when directly related to wood extraction; (iv) third party rights; (v) labor rights; (vi) human rights protected by international law; (vii) the principle of free, prior and informed consent, including as defined in the United Nations Declaration on the Rights of Indigenous Peoples; (viii) tax, anti-corruption, trade and customs regulations.

European importers, who make the products included in the scope of the EUDR available on the European Union market. The rules also apply to European exporters, who market products produced by European farmers.

As the main obligation imposed on European importers is to maintain a system of due diligence to ensure that products placed on the European market are free from deforestation, the rules have an impact on the regions worldwide that produce commodities exported to the European Union, including Brazil’s coffee-producing regions, which will now have to provide the information requested by European customers.

Among this information, the geolocation of the coffee producing area is the most relevant. This is information that should accompany the coffee throughout its marketing chain and, in Brazil, can be obtained via the Rural Environmental Registry (CAR) number. For this reason, the coffee buyer may ask for the CAR number of the rural property in which the coffee originated.

It is a process of managing the environmental and social risks and impacts of business activities and covers the entire supply chain. Thus, the due diligence system of European companies that import coffee involves gathering information from coffee-producing regions around the world, analyzing environmental (especially deforestation) and social risks, and measures to mitigate the environmental and social impacts caused by economic activity, as well as permanent communication with the public about the actions taken.

1. Information collection: Description and quantity of the product; Country of production and its regions; Geolocation of all tracts of land; Date/period of harvest; Exporter data; Evidence that the coffee is deforestation-free and has been produced in accordance with national laws.
2. Risk Assessment: Based on the Country Risk Classification for future publication by the EU; Predominance of Forest/Indigenous Peoples areas in the commodity producing regions; Results of consultations with Indigenous Peoples and existence of land claims by Indigenous Peoples; Deforestation rate in the commodity producing region; Country’s classification in international corruption rankings to assess risks of falsification of information; Complexity of the Production Chain/mixed risks; Other information that may be made available by the EU Expert Panel.
3. Risk mitigation: Requiring additional information from suppliers; Independent audits or inspections; Promoting training and investment in production regions.
4. Communication: Publication of an annual report: (i) Quantity of product placed on the market; (ii) Risk assessment and measures taken; (iii) Consultation with indigenous peoples (if applicable)

The exporter, or rural producer who exports directly to the EU, will have to provide their client with the information requested in step 1 of the due diligence, in particular: Geolocation of the coffee producing area; Date/period of harvest; Name, postal address, email of the company/person responsible for supplying the coffee to the European importer; Evidence that the coffee is free from deforestation after 2020-12-31 and that it has been produced in accordance with national laws.

Therefore, the geolocation of the rural property becomes information that must accompany the coffee throughout its marketing chain and, in Brazil, can be obtained via the Rural Environmental Registry (CAR) number. Therefore, the buyer of the coffee may ask for the CAR number of the rural property in which the coffee originated.

For coffee-producing areas of more than 4 hectares, geolocation must be provided by means of polygons, i.e. latitude and longitude points with six decimal digits to describe the perimeter of the producing area. For areas smaller than 4 hectares, a polygon or a single latitude and longitude point with six decimal digits can be provided.

Through the Cecafé-Serasa Exeperian partnership, currently 48 exporting companies and cooperatives, responsible for around 90% of coffee shipments to the EU, apply technology to evaluate and generate evidence on the conformity of beans to be exported to the EU under EUDR rules. The platform enables automated queries of official public databases of the Brazilian state and analysis based on remote sensing, generating auditable information that the coffee is free of deforestation after 2020-12-31 and that it complies with the applicable national legislation, as well as allowing the location and extraction of the polygons of the producing areas from the CAR database.

The importer will be subject to various penalties, including confiscation of products, revenues, exclusion for up to 12 months from public bidding processes in the EU and from access to public funding, and a fine of up to 4% of the company’s annual turnover in the EU.

Each of the EU’s 27 member countries will appoint a government agency, which will be the competent authority responsible for verifying on its territory that the products which European importers and traders are placing on the market comply with EUDR rules.
The competent authorities’ checks will be guided by criteria for the risk of non-compliance with the EUDR and may vary according to the commodity, the complexity of the supply chain (risks of mixing), whether there are forests adjacent to the producing areas, the level of deforestation risk that will be assigned by the EU to the commodity-producing countries in the future, and the history of non-compliance with the EUDR by the European importer/trader.
Each year, the competent authorities will draw up their verification plans which will include: the national risk criteria and the selection of European importers/traders to be verified. For commodities originating in producing countries classified as standard risk, verification of at least 3% of the European economic operators making the products available on the market will be ensured. If the producing country is classified as high risk, the competent authorities will check at least 9% of European economic operators and 9% of the quantity of products originating in that country.

If the competent authority identifies a high risk of non-compliance with the EUDR, it may record this fact in the EU’s electronic system and, whenever a due diligence declaration relating to a product associated with the registration is submitted in the system, the competent authority will be notified and will take measures, including communication with the customs authority, to suspend the placing of the product on the market. The suspension will be for a period of up to 72 hours, extendable for additional periods of up to 3 working days, according to the need identified by the competent authority.

Serasa Experian’s Smart ESG platform will generate files containing the geolocation of properties required by the EUDR, in GEOJSON (API) and EXCEL (WEB) formats, and a PDF report (Acrobat Reader) demonstrating that the property has undergone an electronic compliance verification process, based on the EUDR protocol and its respective data sources.

It is important that each exporter consults and checks with their importing clients on the types and formats required, as the Smart ESG platform is only covering these formats at the moment.

Checking deforestation

• PRODES: The Program for Measuring Deforestation by Remote Sensing is a government initiative of the National Institute for Space Research (INPE) that provides information on deforestation in all of Brazil’s terrestrial biomes.

• MapBiomas Alert: MapBiomas is an initiative of the Climate Observatory, co-created and developed by a multi-institutional network involving universities, NGOs and technology companies with the aim of annually mapping land use in Brazilian territory and monitoring changes such as deforestation. It is also a system for validating and refining native vegetation deforestation alerts (e.g. Deter, Sad, GLAD) in all Brazilian terrestrial biomes with high-resolution satellite images.

Verification of legality

• Rural Environmental Registry (CAR): a mandatory electronic public registry that integrates environmental information related to rural properties, established by Law No. 12.651 on the protection of native forests. It is an important tool for monitoring and protecting natural vegetation and forests on private land, as well as certain public areas, such as conservation units and indigenous territories.

• Protected Areas/Conservation Units: CNUC – National Registry of Conservation Units, maintained by the Ministry of the Environment with the collaboration of federal, state, district and municipal management agencies. Conservation Units are territories that have environmental resources with relevant natural characteristics, legally instituted by the Government, with conservation objectives and defined boundaries, under a special administration regime, to which adequate protection guarantees are applied. The law establishes only one category of conservation unit that allows agricultural production, which is the Sustainable Use Conservation Area (APA).

• Environmental embargoes: IBAMA – Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (Brazilian Institute of the Environment and Renewable Natural Resources) is a federal agency linked to the Ministry of the Environment with the purpose of authorizing the use of natural resources and their inspection, monitoring and environmental control; ICMBio – Instituto Chico Mendes (Chico Mendes Institute) is a federal agency linked to the Ministry of the Environment, and one of its purposes is to prevent and combat forest fires and to monitor and combat environmental crimes; Sema-MT – the State Secretariat for the Environment is responsible for drawing up, managing, coordinating and implementing environmental and civil defense policies in the state of Mato Grosso, including embargoes on illegally deforested areas.

• Indigenous lands: FUNAI – Fundação Nacional do Índio (National Indian Foundation) is a federal authority linked to the Ministry of Justice with responsibility for implementing policies to protect and promote indigenous rights throughout the national territory. It provides the official database of indigenous lands in Brazil.

• Quilombo Territory: Quilombo is the name given to communities of former black slaves who resisted slavery (between the 16th century and 1888) in Brazil. These communities continue to exist in Brazil and have the right to own their collective territories, which are protected. INCRA – the National Institute for Colonization and Agrarian Reform is the federal body responsible for the database and georeferenced information on quilombola territories.

• Labor and Human Rights: Ministry of Labor and Employment, responsible for registering employers who have been caught by government inspectors submitting workers to “working conditions analogous to slavery” (blacklist of those employers).