New study explores the impact of EU Sustainability Regulations and the implications of the new EU Deforestation Regulation (EUDR) for global commodity supply chains and consumer markets

• EUDR aims to cut greenhouse gas emissions and help limit biodiversity loss by influencing global action on climate change targeting commodities linked to deforestation
• EUDR will require companies trading in certain commodities who wish to trade with the EU to prove that their product and its value chain are deforestation-free
• EUDR compliance premiums for companies operating in the supply chain for oil palm products and their derivatives and rubber could be in excess of USD 1.5 billion for these two commodities alone. This could lead to price increases as companies are likely to pass on the extra costs of EUDR compliance to consumers
• Food, drink and personal care categories likely to be most affected by retail price hikes due to the EUDR include coffee, chocolate, soy-based meat alternatives and oil palm products and their derivatives including hundreds of personal care products such as shampoo

The EU Deforestation Regulation (EUDR), which comes into force at the end of the year, is the latest round of EU sustainability regulation which attempts to influence global regulatory policy and value-chain practices as part of the bloc’s effort to achieve key aims of The European Green Deal such as no net emissions of greenhouse gases by 2050.

The EUDR is arguably one of the most far reaching and impactful pieces of EU sustainability regulation, targeting commodities linked to deforestation, which includes cattle, cocoa, coffee, oil palm, rubber, soya, and wood as well as some of their derived products, such as paper/paperboard, leather, shampoo, chocolate, tyres, and furniture.

EUDR Compliance

Under the EUDR companies that trade in these commodities and their derived products in the EU market or who export them from the EU will need to follow mandatory due diligence reporting of the goods and supply chains they wish to trade in and demonstrate that their products are not linked to deforestation, or to forest degradation through, for example, the expansion of agricultural land. The regulation will require companies and industries in countries that supply the EU to transition to a sustainable, deforestation-free supply chain and legal agricultural value chain if they wish to trade in the EU.

USD 1.5 billion potential cost to EU consumers

Agribusiness Consultants at GlobalData a leading data and analytics company estimate that EUDR compliance premiums for companies operating in the supply chain for just two of the targeted commodities, oil palm products and their derivatives (such as crude palm oil (CPO) and palm kernel oil (KPO)), and rubber could be in excess of ^*USD 1.5 billion alone. Whilst companies operating in these supply chains will be able to absorb some of the costs themselves a good proportion of these compliance premiums are likely to be passed onto EU consumers in the form of food and drinks and product price increases.

EU Sustainability Regulations study

GlobalData Food & Beverages Consultants’ new study: ‘EU Sustainability Regulations: How the EUDR and other Sustainability Regulations will impact consumer markets’, explores some of the EUs key sustainability regulations focusing on the aims of the EUDR and the compliance challenges ahead for farmers, companies, and manufacturers trading in the commodities targeted by the regulation.

The study also looks at what the EUDR could mean for the global supply chain of the target commodities, the potential impact on consumer markets and pricing within the EU and how the EUDR could affect the bloc’s future competitiveness with China.

With the EUDR coming into full force on 30th December 2024 for large companies (2025 for SME’s), the new study is also a timely reminder for large companies operating in the Food & Beverages, Foodservice, Retail and Packaging sectors to finalise their EUDR compliance strategy over the next six months to avoid being late in aligning their operations with the new EUDR rules.

It could be argued that the EU aims to use the ‘Brussels effect’ to direct global policy on sustainability. This is the idea that the global landscape responds to the EU ‘externalizing’ its laws because the bloc is such a significant global consumer market. According to ^**Eurostat, the EU has a population of over 448.7 million people, one of the biggest consumer markets in the world.

The European Investment Bank predicts that the EUs various climate actions could result in a potential hit to EU-wide GDP of – 0.4 % by 2030, taking into account all of the EUs sustainability initiatives, but says the costs of not acting would be greater.

Fred Diamond Senior Food & Beverages Consultant and Analyst at GlobalData comments: “The aims of the EUDR are understandable and cutting greenhouse gas emissions and protecting biodiversity is essential. However, there could be some disruption ahead. The extra demands of the EUDR could lead some commodity suppliers in what the EU terms ‘third countries’ to move away from the EU and increase trade with countries that impose fewer regulatory requirements such as China. Some food categories, such as plant-based meat, may have to reformulate and switch to other protein sources, such as pea protein if the result of the EUDR is an increase in the price of soya for food production.

“The gap between big and small companies could get wider as larger companies are more able to shoulder the additional regulatory burden. The exact impact on consumers will depend on a variety of factors, including how companies choose to respond to the regulation, the extent to which the regulation is enforced, and how much assistance EU member states are willing to give to supplier countries to help them align with the new rules. However, with recent news reports confirming that the world’s top climate scientists expect global heating to go well beyond the current 1.5C target, sustainability regulation associated with cutting greenhouse gas emissions, such as the EUDR which targets deforestation, remains an urgent priority for the planet.”

To read GlobalData Food & Beverages Consultant’s new study ‘EU Sustainability Regulations: How the EUDR and other Sustainability Regulations will impact consumer markets’ in full please download your free copy here

^*The USD 1.5 billion EUDR compliance premium figure is based on GlobalData Agribusiness consultants understanding of current commodity pricing and the likely impact of increased costs of EUDR compliance on the supply chain of these commodities. However, the company recognises that EUDR compliant commodity premiums are still being agreed confidentially between buyers and sellers so some uncertainty remains over the final numbers.
^**Eurostat is the statistical office of the European Union.

Adding cranberries to your diet could help improve memory and brain function, and lower ‘bad’ cholesterol – according to new research from the University of East Anglia (UK).

A new study published highlights the neuroprotective potential of cranberries. The research team studied the benefits of consuming the equivalent of a cup of cranberries a day among 50 to 80-year-olds. They hope that their findings could have implications for the prevention of neurodegenerative diseases such as dementia.

Lead researcher Dr David Vauzour, from UEA’s Norwich Medical School, said: “Dementia is expected to affect around 152 million people by 2050. There is no known cure, so it is crucial that we seek modifiable lifestyle interventions, such as diet, that could help lessen disease risk and burden. “Past studies have shown that higher dietary flavonoid intake is associated with slower rates of cognitive decline and dementia. And foods rich in anthocyanins and proanthocyanidins, which give berries their red, blue, or purple colour, have been found to improve cognition. “Cranberries are rich in these micronutrients and have been recognized for their antioxidant and anti-inflammatory properties. “We wanted to find out more about how cranberries could help reduce age-related neurodegeneration.”

The research team investigated the impact of eating cranberries for 12 weeks on brain function and cholesterol among 60 cognitively healthy participants. Half of the participants consumed freeze-dried cranberry powder, equivalent to a cup or 100 g of fresh cranberries, daily. The other half consumed a placebo. The study is one of the first to examine cranberries and their long-term impact on cognition and brain health in humans. The results showed that consuming cranberries significantly improved the participants’ memory of everyday events (visual episodic memory), neural functioning and delivery of blood to the brain (brain perfusion).

Dr Vauzour said: “We found that the participants who consumed the cranberry powder showed significantly improved episodic memory performance in combination with improved circulation of essential nutrients such as oxygen and glucose to important parts of the brain that support cognition – specifically memory consolidation and retrieval. “The cranberry group also exhibited a significant decrease in LDL or ‘bad’ cholesterol levels, known to contribute to atherosclerosis – the thickening or hardening of the arteries caused by a build-up of plaque in the inner lining of an artery. This supports the idea that cranberries can improve vascular health and may in part contribute to the improvement in brain perfusion and cognition. “Demonstrating in humans that cranberry supplementation can improve cognitive performance and identifying some of the mechanisms responsible is an important step for this research field. “The findings of this study are very encouraging, especially considering that a relatively short 12-week cranberry intervention was able to produce significant improvements in memory and neural function,” he added. “This establishes an important foundation for future research in the area of cranberries and neurological health.”

The study was supported by a grant from The Cranberry Institute. It was led by the University of East Anglia in collaboration with researchers at the Leiden University Medical Center (Netherlands), the University of Parma (Italy) and the Quadram Institute (UK).

‘Chronic consumption of Cranberries (Vaccinium macrocarpon) for 12 weeks improves episodic memory and regional brain perfusion in healthy older adults: A randomised, placebo-controlled, parallel-groups study’ is published in the journal Frontiers in Nutrition on May 19, 2022.