Understanding the EUDR and other global deforestation regulations
Deforestation is an urgent global issue impacting biodiversity, climate stability, and human rights. The devastating effects of forest loss—including reduced carbon storage, habitat destruction, and biodiversity collapse—have led governments around the world to adopt legislation requiring deforestation-free supply chains. These laws mandate that companies ensure the products they source and sell are both legally sourced and do not contribute to the destruction of the world’s forests.
To remain compliant, companies must assess how their supply chains intersect with deforestation risks and meet the requirements of emerging regulations such as the European Union Deforestation Regulation (EUDR), the United States Lacey Act, and others. This typically involves working closely with suppliers, conducting thorough due diligence, and meeting documentation and reporting standards. Through compliance, businesses can play a critical role in preserving global forests and promoting responsible sourcing practices.
This e-book explores the drivers behind deforestation regulations, the evolving global policy landscape, and common compliance challenges. It also outlines how how Source Intelligence’s EUDR solution helps companies simplify due diligence, manage supplier data, and align with deforestation-free requirements at scale.
Why deforestation matters
What's driving modern deforestation
Deforestation is defined as the intentional clearing of forested land for a particular non-forest use, such as agriculture, cattle ranching, logging, mining, and the extraction of oil and gas. While deforestation has occurred around the world for centuries, current-day deforestation is primarily driven by agricultural expansion, which is responsible for about 90 percent of global forest loss. This expansion is fueled by worldwide consumption and the demand for food and agricultural products. Under a growing global population, this demand continues to increase, and the felling of forests continues at alarming rates.
The top commodities behind forest loss
While several commodities and related products are linked to deforestation, beef cattle, soy, palm oil, and forestry products are the primary drivers. These commodities alone account for nearly three-quarters of global deforestation.
Beef cattle
Pasture expansion for raising cattle is responsible for about 41 percent of deforestation, which is 10 percent more than the three remaining primary commodities combined. Most deforestation attributed to cattle production occurs in the tropical forests of Latin America and Africa.
Beef is raised to produce meat, dairy, and byproducts (internal organs, hides, hooves, horns, etc.). Beef byproducts are used in the manufacturing of numerous consumer products, such as leather, instrument strings, adhesives, lotion, paint, and fireworks.
Soy & palm oil
Farmland expansion for oilseed production accounts for about 18 percent of deforestation. Soybean and palm oil dominate the oilseed industry, but several other smaller commodities like sesame, rapeseed, and sunflower oil are included in this category. Palm oil is primarily sourced in Indonesia, while soybean oil is the most common oilseed in Latin America.
Palm oil is the most widely used vegetable oil in the world and is found in countless everyday products, including lipstick, instant noodles, detergent, and soap. Soybeans, on the other hand, are primarily grown for livestock feed, biofuel, and oil—about 93 percent of global production goes to these uses.
Soybean oil appears in many common food items like margarine, mayonnaise, salad dressings, and frozen meals. While soy-based foods such as tofu and soy milk are sometimes blamed for driving deforestation, they actually account for just 7 percent of global soybean use. Growing soy for human consumption has a much smaller deforestation footprint than growing it to feed livestock.
Wood products
Wood products are responsible for about 13 percent of deforestation. In Europe and North America, trees are primarily grown on previously unforested land or managed plantation forests. However, in most tropical countries, trees are sourced from the logging of primary rainforests, destroying them in the process. The rainforests of Indonesia and elsewhere in Asia have been impacted significantly by logging and forest degradation.
Wood products fall under two categories: pulp and timber. Pulp, made from tree fibers, is used in producing paper and related products, such as paper towels, books, and packaging. Timber is used for construction, furniture manufacturing, and fuel.
Other types of agricultural production driving deforestation at a lower rate include cereals, vegetables, fruit, nuts, rice, sugar, and plant-based fibers. Other deforestation drivers beyond agricultural production include settlement expansion, infrastructure expansion, and mineral mining.
The global impact of deforestation
The world loses 10 million hectares of forest each year due to deforestation; one hectare equals about 2.47 acres (or two American football fields). The continents most affected by deforestation are Africa, South America, and Asia (specifically in the southeast regions). Despite deforestation rates slowly declining in recent years, it continues to cause far-reaching negative impacts on our planet. Three of the most significant impacts include habitat loss, climate change, and soil erosion.
Habitat loss
One of the most immediate consequences of deforestation is the loss of habitat for countless species of plants and animals, leading to a decline in biodiversity. Forests are home to about 300 million people and over 80% of the world's terrestrial biodiversity. However, due to the destruction of ecosystems caused by deforestation, the world is losing species at an alarming rate. Some estimates suggest that deforestation of tropical forests could lead to the loss of as many as 100 species a day. This includes critically endangered species such as orangutans, pygmy elephants, and the Sumatran tiger.
Climate change
Deforestation is a major contributor to climate change. Trees play a vital role in absorbing carbon dioxide, a greenhouse gas that contributes to atmospheric warming. As forests disappear, the carbon stored in both the trees and the soil is released into the atmosphere, exacerbating the problem. Furthermore, clearing forested land requires heavy machinery which usually consumes fossil fuels, also emitting greenhouse gases.
Soil erosion
Deforestation leads to soil erosion, as the protective cover of trees is removed, leaving the soil vulnerable to erosion by wind and rain. This, in turn, hampers agricultural productivity and threatens food security for communities that rely on land for sustenance. Flood risk also increases due to reduced interception.
Discover more about deforestation regulations and compliance
You've learned why deforestation matters, what drives it, and its global impact. Next, explore how deforestation affects supply chains, review key regulations, and uncover compliance challenges. Finally, see how Source Intelligence’s EUDR solution supports a deforestation-free supply chain.
Read the full e-book to gain actionable insights for sustainable sourcing.