PROMOTIONAL FEATURE
Like many other industries, the ice cream business is no stranger to regulation changes.
The latest one – regarding the upcoming Deforestation Regulation in the EU – can potentially impact all brands doing business in Europe. As of January 2025, companies using products made from deforestation-related commodities must comply, or they risk significant penalties.
With mandatory compliance just around the corner, we at Innodelice had a lot of questions. Besides discovering more about the new regulation, we wanted to know exactly what will be changing as of January. Perhaps most importantly, we wanted to gather tips on ensuring your ice cream components comply with the EUDR (and what happens when they don’t?).
To provide us answers to our questions, we partnered with smart wood, a leading manufacturer of food-grade wooden sticks. Although we know the EUDR will affect countless ice cream components, we used this opportunity to learn specifically about its impact on wooden sticks.
Using smart wood as a trusted source, we’re here to help you understand and navigate towards EUDR compliance. Let’s get to it!
What Is EU Deforestation Regulation (EUDR)?
Deforestation remains a major concern for global sustainability – and for good reason.
According to the Food and Agriculture Organization of the United Nations, 420 million hectares of forest have been lost worldwide from 1990-2020. Typically driven by agricultural expansion, deforestation has a wide-reaching impact, including increased greenhouse gas emissions and biodiversity loss. Next to China, the EU is the top global driver of deforestation and biodiversity decline.
Although the EU Timber Regulation (EUTR) is currently in place to help mitigate these impacts, a new regulation – the EU Deforestation Regulation (EUDR) – will take it one step further.
Mélanie Dufond, smart wood France’s Ice Cream Sales Director, explains, “Rather than solely focus on timber and timber products, the EUDR will cover a wider range of commodities and their derived products.”
The new regulation, entered into force in June 2023, aims to reduce the consumption of products linked to deforestation or forest degradation in supply chains. It’s expected to boost EU demand and trade for legal, deforestation-free commodities and products.
In addition, the latest anti-deforestation regulation seeks to protect human rights and the rights of Indigenous communities.
What Will Be Changing as of January 2025?
“The key date to remember is January 2025,” explains Dufond. “That’s when EUDR becomes applicable to large companies trading seven key commodities and their derivatives: cattle, cocoa, coffee, oil palm, rubber, soy, and wood.”
For the ice cream industry, this will affect various components, like cocoa, coffee, oil, and soy. Of course, EUDR will also affect the wood used for our beloved novelties' ice cream sticks. Annex 1 of the new regulation shows that wooden sticks (ATIS #4404) must comply.
“As a result, the timber used for ice cream sticks must comply fully with the regulation,” says Marie Desmars, smart wood France’s QHSE Manager. “No matter your company, non-compliant wooden sticks will no longer be an option.”
However, the actions ice cream manufacturers must undertake are company dependent.
“Small to mid-sized manufacturers sourcing from EU suppliers must obtain the diligence statement reference number and make it available upon request. But if the same company imports its ice cream sticks, it’s responsible for completing the entire due diligence process,” Desmars explains.
“Larger companies have more of an undertaking to complete. They must conduct or determine whether the due diligence process relating to the relevant products was performed correctly. They must also upload the due diligence statements to the commission IT platform.”
Once compliance is mandatory, affected companies must demonstrate their goods/products don’t come from recently deforested areas or contribute to forest degradation.
“The EU intends to create lasting change regarding companies’ sourcing practices. They don’t want companies to view the new regulation strictly as an administrative ‘check-the-box’ compliance requirement,” explains Desmars. “Hopefully, companies will embrace this opportunity to make strategic changes and become part of a global impact.”
How to Ensure Your Wooden Ice Cream Stick is Compliant with the EUDR
“Compliance with the anti-deforestation regulation relies on meeting three conditions,” explains Desmars.
“First, a product can’t have contributed to deforestation or forest degradation.
Secondly, products must also be made following the relevant legislation of the country of production. This includes compliance with environmental, land-use, forest management, labor, tax, and human rights laws.
Finally, companies must have a due diligence statement. Within this document, companies will be responsible for uploading extensive information to the European Commission’s IT system. Data from the wood supplier must include the geolocation for all plots of land, the date of production, and evidence the product is deforestation-free and produced in compliance with relevant legislation. Outcomes from a rigorous risk assessment exercise are also necessary.
What If You Don’t Comply?
Our research for this article revealed that a lot can happen if a European company fails to comply with the new regulation.
The penalties framework is broad, spanning from requests for rectification to product retraction or confiscation – a serious disruption to your operations! Companies may also be subject to fines of up to 4 percent of the company’s annual turnover. And let’s not forget about the significant reputational damage of a non-compliant company.
Each EU country can decide on a non-conforming company's penalties and corrective actions. Member States will also be responsible for authorizing competent authorities to ensure compliance with the regulation’s provisions. The administration may even take action based on justified concerns from third parties.
Considerations When Choosing Your Ice Cream Stick Supplier
With just a few weeks until the new regulation takes effect, start asking your stick supplier questions now to ensure they're prepared for the changes. In general, suppliers with a short and local supply chain will be able to easily access information and better mitigate risk.
At smart wood, team members are working hard to put in place all the documentation they’ll need to prove they comply with the regulation. “We’re creating robust documents, including a Public Policy commitment and traceable supply chain information,” says Desmars. “We’re also creating a due diligence system that’s aligned with the risk assessment and mitigation.”
Conclusion on the EUDR
The new EUDR is about so much more than meeting administrative compliance – it’s also about driving companies to reflect on their business practices and make more mindful sourcing decisions.
Desmars advises, “You’re not only going to want a supplier committed to EUDR compliance, you’re going to need one. After all, non-compliance comes with penalties that can significantly affect your company.”
To make compliance as straightforward as possible, smart wood suggests requesting the Due Diligence registration number on each invoice from your supplier. This important information demonstrates the compliance of a company’s actions with the EUDR.
Most importantly, you want to work diligently with suppliers deeply committed to this regulation’s aim. Because, in the end, your choice of supplier is a reflection of your company.
For more details on smart wood, visit the links below:
Website: https://www.smartwood.world/
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ABOUT INNODELICE
Founded by former executives in the ice cream industry, INNODELICE aims to create a worldwide ecosystem of solutions within the frozen dessert industry. Thanks to the relationships fostered by INNODELICE, manufacturers, brands, importers, distributors, and suppliers can discover, buy, and sell solutions to grow their businesses. These solutions include co-manufactured and branded products and innovative and competitive ingredients, packaging, and services. Our collaboration model generates lower costs and fewer risks for our participating partners while optimizing their time to market. To learn more about INNODELICE, contact Andrea Montreuil or visit www.innodelice.com.
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