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The European Union has decided to adopt a trade policy that is increasingly attentive to the environment, particularly deforestation. With the new import regulation, only sustainable and "zero deforestation" products of soy, beef, palm oil, wood, cocoa, coffee, and derived products such as leather, chocolate, and furniture will be allowed on the EU market.

What does "Zero Deforestation" product mean?

"Zero Deforestation" or deforestation-free products are all those products that come from territories (parcels) that have not been subject to deforestation after December 31, 2020. This definition includes a series of essential characteristics that must be respected to demonstrate that a product is "Zero Deforestation" (deforestation-free). Specifically, the product must travel with its traceability, meaning that for each product, the origin must be known, not a generic origin, but the exact parcel from which the product comes.

Reasons behind the new EU Deforestation-Free regulation

According to some estimates, the expansion of agricultural land is the primary cause of forest clearing, responsible for 90% of global deforestation in the period 2000-2018. The responsibility for this phenomenon is not exclusive to producing countries but also to importing countries. The European Union is the second-largest importer of embodied deforestation in the world after China, responsible for 16% of deforestation associated with international trade, for a total of 203,000 hectares and 116 million tons of carbon.

To counter this phenomenon, the EU has decided to introduce a new regulation that aims to reduce its impact on deforestation. This will prohibit the future import from third countries of any product - whether produced legally or illegally - that can be linked to deforestation and forest degradation. Thus, we move from the concept of legality to the broader one of sustainability, including in the concept of deforestation even legal deforestation if it is motivated by agricultural exploitation of the soil for the production of raw materials covered by the regulation.

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Trusty and the new EU Deforestation-Free regulation

To demonstrate the Zero Deforestation (deforestation-free) origin of products, some companies are adopting innovative solutions like Trusty, a traceability system based on blockchain technology. Trusty allows tracing, in a simple and accessible way for all actors in the supply chain, the provenance and origin of raw materials and products, ensuring traceability directly from the field and parcel. In this way, importers and exporters can demonstrate that the raw materials and products included in the EU regulations come from Zero Deforestation (deforestation-free) areas, reducing the risk of purchasing products that contribute to deforestation and responding accurately to the new EU regulation.

Changes in product import relationships with the Deforestation-Free regulation

In addition to geolocation and the ability to indicate the land parcels from which the raw materials and products included in the standard originate, the Trusty system, using blockchain technology, creates accountability for all actors in the supply chain, guaranteeing who declares the information and when. This ensures transparency and immutability of data.

Thanks to the implemented traceability algorithms (track and trace), also leveraging GS1 standards (specifically GS1 EPCIS), Trusty allows all actors to know the origin of the product and raw materials by simply knowing the batch. The track and trace functionality, starting from a batch, allows recognizing all the actors involved in its production, including suppliers. At this point, knowing the actors, it is also possible to know the parcels of origin, responding accurately to the EU Deforestation Free (Zero Deforestation) regulation.

Furthermore, Trusty allows obtaining greater visibility on production processes, enabling the identification of possible inefficiencies and improving the sustainability of the entire production chain.

In conclusion, Trusty represents an innovative and secure solution to demonstrate the Zero Deforestation (deforestation-free) origin of products included in the regulation. Moreover, the inclusion of blockchain technology increases the value of information by protecting all actors involved, thus increasing the credibility of companies and consumer trust.

To implement Trusty in your company, contact us here.