Dealing with the cost of EUDR compliance data and potential monetisation: Opportunities and risks

The European Union Deforestation Regulation (EUDR) introduces strict due diligence obligations, requiring EU operators to trace the origin of commodities and verify that they are deforestation-free. While existing research has largely focused on the design of the regulation and the challenges of its enforcement, little attention has been paid to the role of EUDR compliance data as both a cost factor and a potential asset. This paper analyses the costs of EUDR compliance data, paying particular attention to the distributional effects among market actors. It also explores the opportunities for monetising such data and the implications for producer privacy and data protection. Our findings suggest that compliance costs may not be evenly distributed across the supply chain, with producers in exporting countries being particularly vulnerable. This could create unintended market distortions, including price shifts and the supplanting of EUDR-relevant commodities by illicit alternatives. Notably, the monetisation of EUDR compliance data could offer producer countries new revenue streams. However, many EUDR-relevant commodities originate from countries with weak data protection frameworks, raising concerns about the potential misuse of producers' data. While data monetisation could help offset EUDR compliance costs, it must be accompanied by robust data protection laws. We recommend harmonising, strengthening and enforcing data protection laws in producer countries to ensure that the benefits of EUDR compliance are not achieved at the expense of the most vulnerable. Addressing these issues is critical to aligning the EUDR with broader objectives of sustainability, fairness and inclusive global value chains.