Sustainability requirements are increasingly functioning as de facto market-access rules for US grain exports, with conflicting definitions across countries and regions creating significant trade barriers comparable to tariffs, particularly through the EU's Deforestation Regulation that requires different compliance documentation for each of its 27 member states.
- Sustainability definitions vary widely by sector, country, and region, making consistent regulation and compliance extremely difficult for exporters.
- The EU Deforestation Regulation requires proof that commodities like soybeans were not grown on recently deforested land, with each of the 27 member states implementing requirements differently.
- US exporters often don't learn whether shipments meet a country's documentation standards until the cargo reaches a European port, creating costly delays and rejections.
- The US Soybean Export Council developed a geospatial data tool to help exporters demonstrate compliance in advance and reduce port-level surprises.
- Patchwork sustainability standards are becoming as significant a trade barrier as tariffs or transportation bottlenecks, according to NAEGA leadership.
Sustainability requirements are increasingly functioning as de facto market-access rules for U.S. grain exports, complicated by a lack of shared definitions across countries and sectors, the head of the North American Export Grain Association (NAEGA) told attendees at the Kansas Ag Summit on August 20.
Alejandra Castillo, president and CEO of NAEGA, said the challenge starts with basic disagreement over what "sustainability" means.
"If you talk to anyone in any room and in any setting, they will define sustainability very differently," she said, adding that definitions vary by sector, country and region — making the concept difficult to regulate consistently.
Alejandra CastilloRoy Graber
Castillo pointed to the European Union as the clearest example of sustainability policy now setting the terms of trade. She cited the EU Deforestation Regulation, which requires proof that commodities such as soybeans were not grown on recently deforested land. While the European Commission has classified the U.S. as a low-risk country under the regulation, Castillo said American exporters and farmers still must comply — and each of the EU's 27 member states can implement the requirements differently.
"When your soybean shipments are loaded, if one goes to Italy and one goes to Germany and one goes to Spain, each one of those countries will have a different set of requirements," Castillo said.
She said U.S. exporters often don't learn whether a shipment meets a given country's documentation standards until it reaches a European port. The U.S. Soybean Export Council has developed a geospatial data tool intended to help exporters demonstrate compliance in advance, she said.
Castillo urged exporters and industry groups to keep close watch on sustainability rulemaking abroad, warning that the patchwork of national and regional standards is becoming as significant a trade barrier as tariffs or transportation bottlenecks.
NAEGA, founded in 1912, is a binational trade association representing 52 grain exporters and service providers across the U.S. and Canada.
