Forest protection/supply chains

German Federal Ministry for the Environment launches pilot project "Forestguard"

The German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) has launched the "Forestguard" pilot project to support deforestation-free supply chains as part of the Export Initiative for Environmental Protection (EXI). The Fraunhofer Institute for Material Flow and Logistics IML in Dortmund is working with the REWE Group and Schirmer Kaffee GmbH, among others, to develop an open source solution, initially for tracking the coffee supply chain. The solution combines blockchain technology with other technologies such as artificial intelligence, the Internet of Things and geographical information systems.

German Federal Minister for the Environment Steffi Lemke: "With our demand for agricultural raw materials, we in Germany and the EU contribute significantly to global deforestation. The traceability of deforestation-free supply chains must become even better in the future. With the help of new technical concepts and solutions, the requirements for this can be met even more efficiently and reliably. In the "Forestguard" pilot project, we are combining environmental protection with the possibilities of digitalization and a solution concept that does not pursue individual commercial interests but is made available to companies as an open source application."

Prof. Michael Henke, Institute Director at Fraunhofer IML: "I am delighted that we are able to demonstrate in concrete terms how the regulation can be implemented with the help of new technologies. Fraunhofer IML has been researching blockchain, artificial intelligence and open source for years, making it the ideal scientific partner for this pioneering project. The recommendations for action for companies should also serve as a blueprint for further regulations."

Dr. Klaus Wirbel, member of the Sustainable Finance Advisory Board and Head of Finance / Treasury at REWE Group: "Transparent supply chains are the basis of our fight against climate change and deforestation. With the pilot project, we are gaining important insights into how we can manage the resulting data volumes and flows efficiently and transparently. We will then be in a position to transfer these findings - that would be a major step forward."

To combat climate change and the decline in biodiversity, the European Union adopted a regulation on deforestation-free agricultural supply chains in June 2023. The regulation aims to ensure that beef, cocoa, coffee, palm oil, rubber, soy and timber placed on the EU market do not contribute to deforestation and forest degradation in the EU and elsewhere in the world. Implementation requires transparency across a wide range of data and information. Today, companies along the affected supply chains either do not have this information at all or it is neither available in sufficient quality nor tamper-proof. This is where the "Forestguard" pilot project steps in and aims to create precisely this data and information transparency.

The pilot project brings together information from different actors and sources along supply chains while preserving data sovereignty and creating transparency by combining different technologies. Forestguard is therefore also a role model for other supply chains and regulatory requirements such as the German Supply Chain Due Diligence Act (LkSG). The project also serves as a foundation for supply chain financing and investment financing for sustainability projects - especially in the producing countries at the origin of the global supply chains.

Forestguard "Open source software solution approach for the verification of deforestation-free (coffee) supply chains under consideration of regulatory and financial requirements" was launched in November 2023 and will run for 15 months.

Zukunft - Umwelt - Gesellschaft (ZUG) gGmbH is the project sponsor of the "Environmental Protection Export Initiative" and supports the German Federal Ministry for the Environment in carrying out its tasks.