Hotspots of non-compliance revealed in Brazil’s beef and soy supply chains

Trase and a team of researchers at Instituto Centro de Vida, the Center for Territorial Intelligence, Federal University of Minas Gerais and Renmin University of China have published two analyses of environmental compliance within Brazil’s beef and soy production sectors.

The publication comes at an important time with the implementation of the European Union Deforestation Regulation (EUDR) from December 2026, UK due diligence legislation expected in 2027 and emerging efforts in China to strengthen the environmental requirements.

The analyses focus on the Amazon and Cerrado – biomes that are home to the largest remaining areas of native vegetation in Brazil and play a vital role in regulating the climate and conserving biodiversity, but which also account for most recent agricultural expansion and associated environmental issues and social conflicts.

Speaking at a webinar to launch the research attended by more than 200 business people, government officials and civil society members, Trase global engagement lead André Vasconcelos said: “While Brazil’s Forest Code is one of the most comprehensive and ambitious environmental legal frameworks, significant challenges remain in how it is implemented and enforced. As a result, companies and consumer markets remain exposed to risks of environmental non-compliance.

“At a time of increasing geopolitical tensions, conversations cannot simply be about where responsibility or blame lies. We need to think of innovative ways that producing and consumer countries and companies can collaborate to support this transition towards legal, sustainable, and deforestation-free supply chains.”

Among the Forest Code’s requirements are that every rural property must maintain a certain percentage of native vegetation called the Legal Reserve. In the Amazon, this is 80% of the property, while in the Cerrado it is 20–35%. Properties must also maintain native vegetation protecting rivers, springs and hilltops, known as Permanent Preservation Areas (APP). Any clearing of natural vegetation must be authorised in advance by the environmental agency.

The analyses use official PRODES deforestation data for the Amazon and Cerrado, rural property boundaries contained in the National Rural Environmental Registry System (SICAR), and deforestation authorisations and enforcement actions from federal and state environmental agencies. The period assessed was August 2008 to July 2024, following the Forest Code cut-off date, and includes properties with at least 6.25 hectares of pasture or soy.

Concentration of non-compliance issues

An important finding of both analyses is that evidence of non-compliance with the Forest Code is found in a relatively small number of farms and production areas.

For beef, the analysis evaluated more than 88 million hectares of pasture across 1,625 municipalities in 2024. Researchers identified 36.73 million hectares of pasture, representing 41.7% of the total assessed area, on properties that experienced deforestation with non-compliance issues over the assessment period.

Of this non-compliant pasture area, 78.6% (28.85 million hectares) fell into the strongest evidence categories for non-compliance. This includes properties with environmental enforcement records (11.83 million hectares) and properties with unauthorised deforestation that also do not have enough vegetation to comply with on-property Legal Reserve requirements (17.03 million hectares).

On a more positive note, 52.7% of the mapped pasture was on properties that had no post-2008 deforestation. Moreover, just 136 municipalities accounted for 60% of the pasture area associated with the stronger evidence categories of non-compliance across the Amazon and Cerrado. Mato Grosso contained the largest pasture area associated with these high-risk categories, totaling 7.58 million hectares.

For soy, the analysis evaluated 27 million hectares of soy grown on approximately 134,000 registered properties in 2024. Of this, approximately 8.4 million hectares (31% of the total soy area assessed) were located on properties that recorded unauthorised deforestation or had enforcement records over the assessed period. Of this 8.4 million hectares, 77% showed evidence of a native vegetation deficit according to Legal Reserve requirements or had enforcement records. Authorised deforestation was identified on only 3% of the assessed soy farms.

Despite these issues, 61% of the soy area in the Amazon and Cerrado is on farms without any deforestation since 2008. The analysis found that risks of non-compliance were concentrated in 75 municipalities that accounted for 60% of the soy cultivated on properties with non-compliance issues. Mato Grosso contained the largest area of soy on properties with unauthorised deforestation, representing 3.35 million hectares of soy.

Market exposure to non-compliance

The analyses show that 27% and 44% of the total soy traded from the Amazon and Cerrado respectively was destined for China, while 18% and 7% went to the EU. Among the 10 municipalities with the highest levels of evidence of non-compliance, four supply soy to China and three supply the EU.

For the beef exported from the 136 high-risk municipalities, 61.8% went to China and 3.8% to the EU, representing 32.6% of all beef exports to China and 41.8% of all beef exports to the EU from the Amazon and Cerrado. Brazil's domestic market consumed approximately 68% of total beef supply, underscoring the need for action from Brazilian authorities and domestic buyers as much as from international markets.

Addressing risks is feasible and actionable

The central message of the analyses is that, despite widespread evidence of non-compliance, addressing these risks is both feasible and actionable because the risks are geographically concentrated. By prioritising verification, enforcement and support on a small subset of jurisdictions, regulators and companies have an opportunity to address non-compliance and deforestation issues while making more efficient and effective use of available resources.

Speaking at the webinar, Leonie Ottenschläger, advisor at the German federal agency for agriculture and food, said: "Research, publicly available and transparent data are crucial for competent authorities and operators implementing the EUDR. The finding that soy and beef non-compliance risks are concentrated in specific municipalities makes the challenge of assessing compliance actionable."

She also said that: "Competent authorities can incorporate these findings into knowledge databases to guide risk-based inspections, prioritizing high-risk supply chains and regions given limited administrative resources."

Among the detailed recommendations are that beef and soy producers and traders should adopt and strengthen zero-deforestation agreements. This requires expanding frameworks like Beef on Track and reinstating agreements such as the Soy Moratorium, applying them rigorously to the Cerrado to prevent further conversion.

Moreover, agricultural expansion should be directed towards restoring already converted land. Brazil has approximately 80 million hectares of degraded pasture suitable for soy expansion without native vegetation conversion.

Financial institutions can assist these actions by making access to credit, private finance and barter mechanisms conditional on robust environmental compliance, the absence of any deforestation and the active implementation of environmental regularisation plans.

The Brazilian government should improve the integration and accessibility of official registries and databases. It should strengthen enforcement action against unauthorised deforestation and promote the environmental regularisation of rural properties.

André Lima, secretary for deforestation control at the Brazilian ministry of environment and climate change, said that under President Lula, Brazil was committed to zero-deforestation through eliminating illegal deforestation and reducing, by as much as possible, authorised deforestation. However, this will not be achieved solely through prohibitions, fines, embargos and administrative or criminal sanctions, but by economic incentives.

“It's crucial that the private sector works not only to rigorously reduce products coming from supply chains linked to deforestation, but also offers positive financial, economic and market access incentives to those producers who commit to zero deforestation and choose not to deforest, even though they legally could,” he said.

“We also need to restore the forest in an amount equal to our combined illegal and legal deforestation in order to stabilise by 20203 and then expand the total area of native vegetation cover per biome in Brazil. The role of the private sector is to support these restoration and regeneration processes, thereby contributing to our zero-deforestation goal,” he concluded.

Read the reports

Environmental compliance related to cattle production in the Amazon and Cerrado biomes

Environmental compliance related to soy production in the Amazon and Cerrado biomes

Watch the webinar

Mapping risk, ensuring legality: Environmental compliance in soy and beef supply chains