ISEAL commissioned SCS to examine how “declaration in excess” is understood and used by supply chain actors to comply with the EU Deforestation Regulation (EUDR). Interviews with stakeholders in palm oil, coffee and rubber revealed varying levels of awareness, implementation strategies and potential hurdles. The report highlights different interpretations and implementations of declaration in excess, assessing both potential benefits and challenges from a regulatory and business perspective. 

A common misconception in the discussion around EUDR compliance is the idea that every single grain of coffee or nib of cocoa must be tracked to its exact origin. Instead, the concept of declaration in excess allows operators to provide geolocation data for a larger number of plots than those directly linked to a specific shipment, if all declared sources meet EUDR compliance requirements.  

Overall awareness of declaration in excess remains low among the interviewed supply chain actors. While many recognise the practice once explained, there is reluctance to fully embrace it. This hesitation may be justified, as operators assume full responsibility for all declared plots, meaning that non-compliance in any one declared source could compromise the entire shipment. Companies must therefore weigh the operational benefits gained through declaration in excess against the risk exposure of a single-source compliance failure. 

Navigating EUDR compliance in complex supply chains

The report captures a range of industry perspectives on declaration in excess as a compliance strategy. Some supply chain actors view it as a way to maintain supply chain fluidity while adapting to evolving regulations, ensuring that there are no supply shortages. The interviews confirmed that the flexibility provided by declaration in excess is crucial for actors managing fragmented supply chains. It allows compliant materials from different sources—such as a region (territorial approach), a production area (supply shed approach), a group of producers (group level approach), or at the facility of a supply chain actor (supply chain actor level approach)—to be mixed while maintaining traceability requirements. I.e. a supply chain actor can combine the geolocation data and report all these potential origins to the next entity in the supply chain or into the EU information system.  

Several stakeholders highlighted the cost-effectiveness as another major benefit, as declaration in excess reduces the logistical burden of strict segregation during storage, transport, and processing, ensuring a more efficient supply chain. Moreover, an aggregate traceability approach can enhance smallholder inclusion by allowing their products to be integrated into larger, compliant supply networks and not having to maintain costly individual traceability in each shipment. Likewise, when physical segregation is impractical, such as with bulk liquids like palm oil or rubber, declaration in excess provides a viable alternative that ensures compliance without disrupting operations. Finally, declaration in excess under the EUDR aligns with the chain of custody models used by sustainability systems today, and enables adapted mass balance approaches. These emergent “controlled” mass balance chain of custody models allow the mixing of certified and non-certified materials, provided both comply with the EUDR. In this way, declaration in excess supports the continued use of mass balance as a relevant and viable chain of custody model in certification. 

Challenges and risks of declaration in excess  

While declaration in excess provides flexibility, it also presents significant risks that supply chain actors must navigate. Interconnectedness and contamination pose a major challenge, as non-compliance in just one declared source can invalidate an entire shipment, making rigorous monitoring essential. Additionally, inconsistent understanding of the concept across industries may cause confusion and uncertainty, particularly for downstream operators who must interpret varying applications across commodities.  

The approach is also highly data-dependent, increasing the risk of human error in record-keeping and verification, especially when relying on sampling methodologies. In practice, more emphasis will need to be placed on determining whether upstream due diligence was conducted in line with the EUDR requirements.  

Furthermore, the interviews revealed that credibility concerns arise when consumer expectations for direct traceability clash with the aggregated traceability approach of declaration in excess. This can potentially undermine trust in sustainability claims. Lastly, technological limitations within the EU’s information system restrict the number of geolocation points that can be declared per shipment, creating bottlenecks for large-scale operators handling high volumes of mixed compliant materials. 

Conclusion 

In summary, for declaration in excess to be effective, standardised guidelines and verification systems are needed to ensure compliance and consistency. For businesses, this approach offers efficiency gains by reducing logistical burdens while maintaining regulatory compliance. For sustainability systems, it enhances complementarity by allowing certified and conventional EUDR-compliant materials to coexist. For policy makers looking to avoid unintended consequences, it supports smallholder inclusion by enabling their participation without prohibitive traceability costs.  

Ultimately, clear regulatory guidance, industry collaboration, and robust due diligence are essential to balance compliance with operational feasibility, ensuring that declaration in excess serves as a practical tool for sustainable and inclusive supply chains. 

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ISEAL's work on deforestation-free supply chains is generously supported by the Walmart Foundation.