Risk benchmarking for the EU deforestation regulation: Key principles and recommendations

Trase and Proforest set out a framework and methodology to inform the design of the EUDR benchmarking system. These recommendations build on experience advising industry groups on commodity risk benchmarking systems to meet voluntary deforestation commitments.

The EU deforestation regulation (EUDR) aims to prevent commodities associated with deforestation entering the EU market. Under this regulation, the European Commission will establish a three-tier benchmarking system to classify commodity-producing countries and parts thereof as low, standard or high risk (Article 29). When the EUDR entered into force on 29 June 2023, all countries were classified as standard risk. No more than 18 months later, the Commission will classify countries and parts thereof as low or high risk and publish this list. The system will enable regulators to target checks on products from high-risk countries, and operators to undertake simplified due diligence for products from low-risk countries.

This policy briefing by Trase and Proforest sets out a framework and methodology to inform the design of the EUDR benchmarking system. These recommendations build on experience advising industry groups on commodity risk benchmarking systems to meet voluntary deforestation commitments. This is presented in two case studies: the first, classifying deforestation and ecosystem conversion risk for beef at national level; and the second, for soy at subnational level in Brazil. Finally, this policy briefing sets out key lessons and recommendations for use of the framework and methodology in different EUDR implementation contexts.

Key messages from the briefing

1. Risk benchmarking has a crucial role in the successful implementation of the EU deforestation regulation by targeting checks on commodities produced in high-risk regions and enabling simplified due diligence on those from low-risk regions.

2. While subnational benchmarking should be prioritised for countries identified as high risk, it is relevant for any country with high variation in deforestation rates between subnational regions and should be considered in such cases for standard risk countries.

3. Risk benchmarking should be done on a commodity specific basis where sufficient data is available, as different commodities can have different risk profiles in the same country.

4. Classifying risk based on the relative amount of commodity deforestation in a country or subnational region compared to the total amount globally or in a country provides an objective and comparable benchmark that can be used consistently across commodities and scales.

5. The application of simplified due diligence for low-risk regions merits a very conservative definition of low risk.

6. Industry groups are already using risk benchmarking to implement voluntary deforestation commitments. Their experience provides useful lessons for the EUDR benchmarking system.

7. Engagement with producer governments and local stakeholders on the design of the benchmarking system will be critical in building trust and ensuring that it is accurate and uses appropriate data.

Read the full briefing

Read about the in-depth methodology developed by Trase and Proforest for this work.

This briefing was originally published on Trase Insights.