In Conversation with Simon Breure: Ambitious Regulations, Complicated Reality.
Earlier this month, Regeneration’s Director of Green Commodities, Simon Breure, attended the Innovation Forum’s Sustainable Commodities and Landscapes Forum in Amsterdam. The forum discussed how businesses can adapt to incoming legislation and regulatory pressure on commodities, and what supply chain transformation really means on the ground for businesses, farmers, forests, biodiversity, and nature.
Image Source: Regeneration
We caught up with Simon to discuss his key takeaways from the event:
Most companies and countries are not ready for the European Union Regulation on Deforestation-free Products (EUDR).
Under the EUDR, from January 2025, traders who bring commodities like soy, beef, palm oil, wood, cocoa, coffee, and rubber to the EU market, or export from it, must prove that the products are not harvested from recently deforested land nor have contributed to forest degradation. This requires companies to source from deforestation-free areas and create fully transparent supply chains, necessitating effective Monitoring, Reporting and Verification (MRV) systems.
However, Simon shares that “most companies will not be ready to meet these EU requirements within the stipulated timeline”. With just over a year until the EUDR comes into effect, value chain actors do not have enough visibility on what the EUDR means in practice in terms of import documentation, information exchange, and reporting.
As an interim solution, a grace period could be implemented, during which penalties would be voided and companies could gradually scale toward meeting the requirements.
Creating truly sustainable supply chains at scale requires innovative finance mechanisms.
Many tropical, smallholder supply chains face systemic challenges, including low yields, low farm gate prices, and limited access to credit. To improve the sustainability of their supply chains, many companies are beginning to implement targeted measures and programs, examples of which include training their employees in good agricultural practices (GAP), providing increased access to inputs, and adopting measures towards eradicating deforestation and child labour, in line with certification schemes.
“However, most of these measures and programs do not unlock sufficient external capital,” comments Simon, “and this prohibits the critical mass of impact to create lasting change”.
As Simon puts it, “true supply chain transformation requires long term supply agreements, the development of new farm service delivery models (bundling extension services, inputs, credit, aggregation), and innovative blended finance solutions. Furthermore, programs should be holistic and designed from a regional perspective to avoid a waterbed effect where local improvements are offset by new detriments nearby”.
Achieving net zero goals requires an overall supply chain scope.
The majority of western food and agriculture companies have now made commitments to strong net zero goals that cover regenerative agriculture.
However, Simon states that “the widespread adoption of this new focus area raises the risk of dilution of other sustainability programs. These net zero and regenerative agriculture commitments can only be successful when they are fully integrated in overarching supply chain transformation programs, taking the full landscape into consideration, and including the adoption of multi-layered agroforestry models as well as forest protection and restoration initiatives in the landscape.”
With COP 28 starting today, these reflections remind us that policy decisions require deeper understanding of the realities of producers and companies at the end of commodity value chains.
Regeneration offers leading corporates opportunities to transform their existing supply chains, taking into consideration the impacts on and capacity of all stakeholders involved. Regeneration has 8+ years of on-ground expertise to shift tropical commodity supply chains to agroforestry and other regenerative practices.
Regeneration is a partnership between Systemiq, the system change company, and Palladium, a global implementer of development programs.