Deforestation-free regulations in the EU pose significant obstacles for fractured commodity supply chains, such as cattle from Brazil. The lack of a common data language and definitions stands in the way of interoperable collection and sharing among systems.
Key Takeaways
Solution
Wholechain and REVER Consulting created a traceability data-sharing protocol supporting the Sustainable Production of Calves program for IDH, a global sustainable trade non-profit, based on GS1's EPCIS standard, with Key Data Elements (KDEs) and Critical Tracking Events (CTEs) as the cornerstone.
Challenge
Cattle farming is one of the biggest drivers of deforestation in the world. Brazil, as one of the world’s largest exporters of beef, has a crucial role to play in the fight against deforestation.
Currently, approximately 50% of agricultural products exported from Brazil to the European Union (EU) are linked to deforestation and forest degradation—particularly soy and beef.1 Recognizing its role as a major economy and consumer of these commodities, the EU proposed a Regulation for Deforestation-Free Products in 2021. The new regulation imposes mandatory due diligence rules on companies that want to sell relevant products in the EU market. Companies must prove that their products are free of deforestation and comply with all relevant laws in the country of production. The EU law requires companies to “collect precise geographical information on the farmland where the commodities that they source have been grown so that these commodities can be checked for compliance” (European Commission, 2022).
Organizations such as the OECD - FAO (Organisation for Economic Co-operation and Development—Food and Agriculture Organization) and ProTerra Foundation have stated that it is necessary to go beyond traditional certification schemes in order to comply with zero deforestation requirements. The GS1 Global Traceability Standard states that:
“ ... as it emerges from the European Commission’s own impact assessment study, certification lacks the effectiveness and reliability to [ensure] that the commodities and products they cover are effectively and reliably sustainable and legal." (Greenpeace’s views on the Commission proposal for an EU regulation on deforestation-free products, 2022)
Many companies rely on transparency solutions that provide supply chain mapping capabilities, but they are often unable to provide detailed product information for supply chain improvements.
" ... these solutions often lack the ability to track or trace an individual object (with a globally unique serialized identifier) along a specific supply chain path, and their focus may instead be more on being able to say whether all upstream suppliers hold specific certifications or accreditations for organic/environmentally friendly/ethical practices. Traceability solutions offer detailed levels of traceability and often include event-based data repositories and the ability to logically link related events.” (GS1 Global Traceability Standard)
The lack of a common language and definitions stands in the way of interoperable data collection and sharing among systems, which is necessary to rapidly scale solutions across industry stakeholders. GS1’s EPCIS (Electronic Product Code Information Services) Framework introduces two concepts crucial for interoperable traceability: 1) Critical Tracking Events (CTEs), the definition of events that the traceable object undergoes during its lifecycle, and 2) Key Data Elements (KDEs), the specific data and format that needs to be collected at each of the CTEs.
“In order to ensure an appropriate level of interoperability, organizations will need to ensure that their systems are all built on a common set of standards.” (GS1 Global Traceability Standard)
Two Concepts Crucial for Interoperable Traceability:
1. Critical Tracking Events (CTEs)
The definition of events that the traceable object undergoes during its lifecycle
2. Key Data Elements (KDEs)
The specific data and format that needs to be collected at each of the CTEs
Solution
GS1 provides standards for interoperable event-based traceability to ensure detailed visibility along the supply chain. This includes the visibility of point of origin, chain of custody, and distribution of products, among other events. Such meticulous traceability is of utmost importance in achieving the goal of zero deforestation in Brazilian cattle supply chains, where Wholechain, a GS1 Solution Partner, and REVER Consulting are supporting the Sustainable Production of Calves Program for IDH, a global non-profit dedicated to facilitating sustainable trade.
In March 2022, the participating partners launched a national protocol for sustainable production, detailing steps to achieve traceability. Subsequently, the partners drafted a traceability framework for beef and leather to simplify data exchange (interoperability) between different applications across the industry. The framework is based on GS1’s EPCIS standard and underwent technical review by industry stakeholders and the GS1 team.
The framework defines the KDEs and CTEs for Brazil’s cattle supply chain so that traceability solution providers can share data interoperably and scale data availability for industry stakeholders across Brazil.
Benefits of Event-Based Traceability
Accurate Origination
Many certifications that rely on mass balance are not able to verify the origin of specific raw materials. Instead, they track an equivalent quantity of raw materials produced without linking the quantity to a specific production chain or product. However, tracking critical events records an exact point of origin.
Interoperability
A common language for cattle traceability aligned with global standards, including GS1 EPCIS, allows data sharing between different actors and technology systems worldwide.
Chain-of-Custody Visibility
Certifications usually rely on periodic, often yearly, audits of facilities. Event-based traceability details all transactions within the supply chain, providing the full chain of custody of raw materials and products.
Data Consolidation
Event-based traceability considers all relevant certifications, social environmental analysis, and legal and compliance requirements along the supply chain, including information that is vital for improving practice and quality.
Transparency
As materials move throughout the supply chain, EPCIS facilitates the capture and sharing of relevant information in an interoperable format for trading partners at each point of the value chain.
KDEs and CTEs in Practice: Event-Based Traceability in the Beef Supply Chain
As participants in the IDH Sustainable Production of Calves Program, cattle producers receive technical assistance regarding best practices in their operations. They are also provided with opportunities to connect with the market and establish traceability measures for their products.
To ensure environmental and social sustainability as well as safeguard the environment and welfare of local communities, each producer and birth farm undergoes a thorough socio-environmental risk analysis. This assessment evaluates compliance with regulatory requirements and zero deforestation standards. Data inputs for analysis include:
Government Regulations and Property Information
- Geolocation of the property
- CAR - Cadastro Ambiental Rural (Rural Environmental Registry)
- Copy of the CCIR - Certificado de Cadastro de Imóvel Rural (Rural Property Registration Certificate)
- Copy of the ITR - Imposto Territorial Rural (Rural Territory Tax)
The Farm's Productive Capacity
Extract from INDEA (Agricultural Defense Institute) for one year, containing cattle stock and its distribution by categories
Socio-Environmental Criteria
- Illegal deforestation
- Indigenous Land (IL)
- Protected Areas (PA)
- Rural Environmental Registry (CAR) Status and CAR Modifications
- Environmental Embargoes (Polygon, IBAMA, and Sema-MT)
- Slave Labor
When a calf is born on the birth farm, it is referred to as a “commission” event. Each calf is assigned an official Radio Frequency Identification (RFID)-enabled ear tag provided by SISBOV (Brazilian System for Individual Identification of Cattle and Buffaloes), which contains a unique serial number for individual animal identification.
To ensure traceability, the producer, farm, and each calf are registered in the digital traceability system (Wholechain),2 along with all necessary compliance documentation. Producers receive training and technical assistance on animal tagging and using the system.
The following data inputs are recorded:
- Information about the birth farm, including its location
- Farm registration in CAR
- SISBOV serial number assigned to each calf
- Event data, including geolocation, date, and time of birth
When a calf is sold to a fattening farm, a shipping event is recorded. The corresponding buyer also records a receiving event upon receipt of the cattle. The same applies to other shipping and receiving operations between stakeholders in the supply chain, such as the fattening farm and slaughterhouse, and between farm locations (i.e., different farm entities).
Upon arrival at the fattening farm, the producer confirms receipt and can include additional information such as vaccination history.
Data Available at This Step:
- SISBOV serial number
- Linking KDE (batch, lot, or serial number) with the Global Trade Identification Number® (GTIN®) when applicable
Data Inputs:
- Information about the fattening farm or industry, including location
- Event data: geolocation, date, and time of shipping or receiving
- The Animal Transport Guide (Guia de Transporte Animal - GTA)
The serialized tagging of animals allows for the aggregation and disaggregation of animals at various points in the supply chain without losing the individual history of each animal. So, calves from zero deforestation birth farms can be distinguished from those born on farms with legal deforestation that claim zero illegal deforestation. This animal-by-animal differentiation allows for scaling the volume of animals traced over time as market demand grows.
Data Available at This Step:
- Location
- SISBOV serial number
- Serial number (or batch/lot of post-slaughter products)
- The Animal Transport Guide (Guia de Transporte Animal - GTA)
Data Inputs:
- Event data: geolocation, date, and time of the event
- Product data: form and origin
At the slaughterhouse, the animals are “transformed” into a variety of products, including beef cuts, salted skins for leather, inputs for the cosmetics and pharmaceutical industries such as collagen, biofuels, and even raw materials for the production of sports equipment like tennis rackets.
Meatpackers record receiving and transformation events. Subsequently, meatpackers record batch lot numbers for the beef byproducts that they ship to downstream buyers such as leather manufacturers. These subsequent registered stakeholders document traceability data on a batch-lot basis for the byproducts of meat processing. This ensures that the segregated traceability of serialized cattle is connected to the batch lot beef products post-slaughter. By connecting these halves of the supply chain, purchasers of leather see birth farms involved in specific lots of leather.
Data Available at This Step:
- Location
- SISBOV serial numbers of cattle slaughtered
- Batch, lot, or serial number of beef byproducts and raw material produced from slaughter
Data Inputs:
- Event data: geolocation, date, and time of the event
- Product data: form and origin
- Processing lot number(s)
- Specific meat cut codes
- Quantity and weight of the by products
After the meat or leather processing, the product goes to brands, manufacturers, retailers, restaurants, etc. When the product is consumed or destroyed, a decommission event is recorded, indicating the end of the product’s life in the supply chain. This event is recorded by the buyers after the selling process (e.g., left the supermarket shelf, purchased by an end consumer).
The same event also can be used to track dead or disqualified cattle prior to their processing at the slaughterhouse.
Data Available at This Step:
- Location
- SISBOV serial numbers
- Batch, lot, or serial number(s)
Data Inputs:
- Event data: geolocation, date, and time of decommission
- Product data: form and origin
Summary
The meticulous documentation of the cattle product’s journey from a commissioning event at birth, all the way through to when the product is sold to an end consumer is crucial for sustainable and transparent value chains. The pilot documented the use of GS1’s EPCIS standard as part of a framework for international traceability, enabling interoperable exchange of data across all the different parties recording CTEs and KDEs so that the entirety of the journey becomes visible, even through product transformations. In this case, with the fight against deforestation backed by regulations from the EU and the recently introduced FOREST Act from the U.S., the cattle industry now has a way to firmly establish the origin of a cattle product, such as a pair of leather shoes, and document that it is free of deforestation. However, the ability to capture and seamlessly share all this information across the entire value chain offers a significant opportunity. Whether it is establishing a product’s embodied carbon and documenting certifications to inform a buyer or knowing exactly where products are in the supply chain so trading partners can respond swiftly to disruptions, this type of granular traceability provides the foundation for more sustainable, resilient supply chains.
Related Articles
Here are additional resources that might interest you.
