Story | 06/20/2024 08:38:05 | 5 min Read time

UPM Pulp gearing up for new regulation on deforestation

The EU Deforestation Regulation presents new traceability requirements for all suppliers of wood-based products. In active cooperation, UPM Pulp wants to help its customers prepare for upcoming changes.

The EU Deforestation Regulation (EUDR) aims to stop seven main commodities and their derived products – cattle, cocoa, coffee, palm oil, rubber, soya, and wood – from entering the EU market if it cannot be proven that their production did not cause deforestation or forest degradation. The regulation came into force in June 2023, with full compliance required from December 30, 2024.

Since UPM is a company that only undertakes sustainable forestry, the EUDR requirements to avoid deforestation and forest degradation are supported and not an issue. From UPM’s perspective, the key issues relate to the practical challenges around meeting the regulation’s requirement that all sellers of products must provide due diligence statements. These statements are required to include geolocation coordinates from where the commodity raw materials originate, and must be submitted prior to placing products on the market.

UPM Pulp’s aim is to develop the required processes and IT solutions to manage the due diligence statements and other data requirements of EUDR in the most practical and manageable way possible. The company is working in close cooperation with industry groups and associations to find solutions to the technical and practical challenges. 

Building on sustainable forestry practices

According to UPM’s Antti Ilovuori, Senior Manager, Digital Supply Chain, UPM is in a good position to comply with EUDR.

“I believe the regulation can be seen as an advantage for a sustainable operator such as UPM that takes good care of its own forests and helps our wood suppliers to follow the same principles of sustainable forest management,” says Ilovuori, in charge of coordinating the EUDR project at UPM’s Pulp business.

He also adds that the technical capability for raw material traceability at UPM is at an advanced level and provides a good basis for developing the systems further to comply with new requirements.

“For example, in our pulp business we know the exact plots of land in Uruguay where our eucalyptus pulp originates and can already map those geolocations to our production batches. We have invested in RFID for several years and implemented it as a technology for identifying individual production units,” Ilovuori explains.

However, what needs to be further developed in order to comply with EUDR is automating the exchange of data and updating all receipt processes of raw materials to real time, as the regulation rests on the principle of a “live” flow of information directly connected to a product.

Developing an automated process

Under the new regulation, operators are required to submit their due diligence statements to the EU’s Traces online platform, and will receive EUDR reference numbers in return. These can then be passed on to customers. In UPM Pulp’s case, the process differs depending on whether the pulp is produced in Uruguay or Finland, and the shipping destination.

For pulp produced within the EU or shipped directly into the EU from outside, the EUDR reference number will be retrieved from the EU Traces system and supplied to customers by UPM Pulp. For pulp produced outside of the EU and initially shipped to non-EU markets, UPM Pulp will provide geolocations directly to customers upon request, as it is not possible to obtain reference numbers without an EU market entry port.

Ilovuori says that one of the main questions that customers are interested in – and should indeed focus on with all their raw material suppliers – is how to receive the EUDR reference numbers and how to map the raw material reference numbers to their own products.

“The EU is currently developing an Application Programming Interface (API) to enable the process of entering due diligence statements into the Traces system to be automated, and we are developing our own IT systems and ERP (Enterprise Resource Planning system) to work seamlessly together in the new process.”

Guidance through the transition period

UPM aims to provide the correct information concerning EUDR in a timely fashion so that customers are also able to comply with the regulation ahead of the compliance deadline. Ilovuori says that a recent customer webinar on EUDR was very popular, and the company is considering organising a similar event, along with providing progress updates.

He encourages customers to contact UPM through the regular service or sales channels regarding any questions they may have related to EUDR.

“Close collaboration and the exchange of information between suppliers and customers is important so that the requirements are clearly articulated as early as possible. We will continue an active dialogue and have, for example, sent out a survey on what our customers expect from UPM as a supplier in terms of EUDR, including a question on the preferred way of receiving information on reference numbers,” Ilovuori concludes.

 

 

Text: Timo Nykänen 

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