EUDR Mass Balance vs. Segregation: What the Regulation Actually Demands - and How to Run It Operationally

If your supply chain runs on RSPO, ISCC, or Rainforest Alliance mass balance today, you already have a traceability habit. You track certified volumes in, certified volumes out, and you balance the books. That discipline is real - but it is not what the EUDR requires. The EU Commission has been explicit: mass balance chains of custody do not fulfil the regulation's requirements. Understanding exactly why - and what to do instead - is the operational challenge sitting in front of every trader, crusher, roaster, refiner, and warehouse manager right now.

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Why Mass Balance Feels Like It Should Work

Certification schemes taught the commodity trade to think in volume accounting. Under RSPO mass balance, for example, a mill can receive a mix of certified and uncertified palm fruit, sell certified palm oil up to the volume of certified inputs received, and keep a running balance. The physical product and the certified claim travel separately. It works for sustainability premiums because the claim is statistical, not physical.

Mass balance certification fails to meet EUDR compliance standards due to its inability to precisely trace commodities back to their origin, while certifications like segregated and identity preserved do qualify. The logic is simple: EUDR is not a premium scheme. It is a market-access rule. The question is not "did you buy enough certified volume?" but "can you prove this specific quantity came from these specific plots?"

Mass balance chains of custody that cannot prevent the mixing of deforestation-free commodities with commodities of unknown origin or non-deforestation-free commodities are not allowed under EUDR. The Commission's FAQ goes further: compliant goods may not be mathematically mixed with goods of unknown origin. Arithmetic offsetting is not traceability.

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The Rule in One Sentence

Every quantity you place on the EU market must trace back to identified, geolocated plots of land - and that assignment must survive every step of your supply chain.

The Commission is clear: "Commodities must be segregated from unknown origin or non-compliant commodities at all stages." No blending, no partial traceability, no batch dilution allowed. Physical mixing is not banned outright - what is banned is mixing that destroys the clear assignment of quantities to origins and geolocation. The decisive factor is not that physical mixing is excluded in every case, but that mixing does not result in the relevant quantities losing their clear assignment to origin and geolocation.

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The Three-Level Model: DDS / Batch / Delivery

Most ERP and WMS systems conflate these three concepts. EUDR forces you to separate them cleanly.

The DDS level is where the due diligence declaration, reference number, verification number, origin data, risk assessment, and validity logic are managed. The batch level is where you document which specific quantity of goods has which origin, which properties, and which DDS reference. The delivery level is where you record which quantity from which batch was delivered to which recipient.

This separation is crucial to ensure traceability. The DDS refers to a defined quantity of goods - usually a batch in operational practice - and the physical delivery is only a subsequent event. The clean separation of DDS, batch, and delivery levels is therefore the backbone of EUDR compliance.

One Batch, Many Deliveries

A cocoa importer receives 500 MT of beans from a cooperative in Ghana. They submit one DDS covering the full 500 MT before the first truck leaves the warehouse. Over the following weeks, they ship 120 MT to a Belgian chocolate maker, 200 MT to a German processor, and 180 MT to a Dutch refiner. Each truck is a separate delivery note - but all three reference the same DDS.

A single DDS can cover multiple physical batches or shipments of relevant products - for example, where a product is placed on the market successively over a period of time. The operator must confirm that due diligence was carried out for all relevant products to be placed on the market, and once the quantity covered by the DDS has been used, the operator must submit a new DDS for additional quantities.

A DDS may not cover consignments or batches for a period longer than one year from submission. Once the declared quantity is exhausted - even before twelve months - a new DDS is required.

One Delivery, Many Batches

A soy crusher ships a single 40-foot container that draws from two separate intake batches: 18 MT from Batch A (Mato Grosso, DDS-REF-001) and 12 MT from Batch B (Paraná, DDS-REF-002). The delivery note covers 30 MT, but it must reference both DDS numbers and both origin sets. The recipient needs both reference numbers to satisfy their own inbound documentation obligation.

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Mixed and Collective Batches: The Documentation Checklist

Silos, tanks, and bulk storage are where mass balance thinking dies hardest. When you draw down from a silo that has received multiple intake lots, you are creating a mixed batch - and that mixed batch needs its own documentation trail.

If several batches are physically merged into a collective or mixed batch, the new batch must be documented in such a way that it can be plausibly proven which origins and DDS references it contains even after mixing.

For every mixed or collective batch, you must document:

1. The input batches - batch numbers for every lot that contributed to the mix
2. Quantity share per input batch - how many tonnes (or kilograms) came from each
3. DDS reference number for each input batch
4. Origin information - country of production and geolocation for each input
5. Date and place of mixing
6. The responsible process step (e.g., silo fill, tank blend, re-bagging line)
7. A new batch number for the resulting mixed batch

If a single product is brought together from different origins - for example, a coffee blend from several regions - a new relevant item is created for which a corresponding DDS must be submitted, including the geolocation data of all underlying production areas. For a new DDS, information from previously submitted DDSs can be referenced upstream so that data does not have to be entered twice.

The Silo Problem

When compliant goods from various origins are mixed in a blend, the due diligence statement must cover the origins of all products included in the blend since the last time the silo or tank was fully emptied. This requirement is at odds with the commonly used First-In-First-Out (FIFO) method, which assumes that the oldest entries are used or removed first.

If the silos are not regularly emptied, the operator would need to declare the place of production of all goods that entered the silo during a time period that ensures that commodities of unknown place of production are not mixed in the process. For instance, when downloading part of the goods stored in the silo, this could be safely done by declaring the geolocation of all previous goods that entered the silo up to a minimum of 200% of the silo capacity, provided that the silo works in the first-in-first-out system. This approach applies to relevant commodities or products stored in stacks, tanks, and all continuous processing.

The practical implication: if you cannot empty and restart your silo cleanly, you need to declare in excess - covering all plots that could plausibly have contributed to the drawdown. For declaration "in excess," full responsibility for compliance of all plots is assumed. If one plot in the DDS is not compliant, the entire set of plots is non-compliant. Declaring in excess is not a free pass; it raises your blast radius.

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Quantity Accounting and Drawdown: Why a Wide DDS Is a Risk

A DDS may not cover consignments or batches for a period longer than one year from submission. That one-year window is a flexibility tool - but it comes with a hidden cost.

Companies are allowed to submit a DDS that covers multiple physical batches or shipments of multiple different relevant products over a period of one year from the time of submission, instead of submitting a statement for every batch or shipment, provided that due diligence was carried out for all relevant products and no or negligible risk was found.

The drawdown logic works like a prepaid balance: each delivery consumes a portion of the declared quantity. When the balance hits zero, you submit a new DDS. This is operationally efficient - but the wider you cast your DDS, the more exposure you carry if something goes wrong. In the event of non-compliance, interim measures or sanctions may apply to all products covered by that DDS, including separate partial shipments already delivered. A single non-compliant plot in a broad DDS can contaminate months of shipments.

Submitted due diligence statements can be amended or withdrawn within 72 hours of the reference number being issued, provided the reference has not yet been used in a customs declaration, the product has not been made available or exported, and no authority audit is intended. That 72-hour correction window is narrow. Build your review process upstream of submission, not after.

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GeoJSON Practicalities for Blends With Many Plots

When a blend draws from dozens of farms, the geolocation data can get large fast. A single DDS may not exceed 25 MB. For operators managing hundreds of smallholder plots per shipment, that ceiling is reachable.

For plots greater than 4 hectares (excluding cattle), geolocation must be submitted as polygons with latitude and longitude coordinates up to six decimal places. The EUDR Information System only accepts the GeoJSON format (WGS-84 / EPSG-4326).

Data-reduction options within the rules:

• Plots under 4 hectares: a single latitude/longitude point is sufficient - no polygon required
• Cattle establishments: a single point is also acceptable regardless of size
• Larger plots: reduce polygons to the essential vertices; you do not need every GPS waypoint, only the perimeter corners that accurately describe the plot boundary
• Coordinate precision: validate to six decimal places - more is unnecessary and adds file size

Traceability practices that aim to declare an excessive number of plots (region or country-wide) are generally not in line with the EUDR. Declaring an entire province to cover a gap in your supplier data is not a compliant workaround.

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What to Fix in Your ERP/WMS Before December 2026

If you keep clean records of quantities, document mixing processes, pass on reference numbers in a structured manner, and use an ERP system with blocking logic, you avoid the typical sources of error: duplicate quantities, uncovered deliveries, and lost origin references after mixing processes. Many companies solve this using clear ERP/WMS rules and digital links by using the reference numbers from the EU information system as "anchors" in their inventory and transaction data.

Here is what that looks like in practice:

1. Blocking logic on uncovered goods No goods receipt should be able to proceed to outbound without a DDS reference number attached. Build a hard stop - not a warning - in your WMS goods-receipt workflow. If the reference number field is empty, the batch cannot be released for picking or shipping.

2. DDS reference number as an anchor field Add mandatory fields in the ERP or supplier system: full address, e-mail, web, and - as a technical field - DDS reference number/explanation ID with link to the incoming product flow (batch, goods receipt document, order number). The reference number must travel with the batch record, not sit in a separate compliance spreadsheet.

3. Audit trail for repacking and picking Every time a batch is split, repacked, or drawn down into a new pick, the system must create a child record that inherits the parent DDS reference and quantity share. This is the digital equivalent of the mixed-batch documentation checklist above.

4. Reference number vs. verification number - know the difference The reference number must be passed proactively to the first downstream actor. The verification number is an additional layer of security for the deposited data. Only the reference number (or declaration identifier for MSPOs) must be actively passed on. Downstream operators and traders collect and store the numbers for five years, without any due diligence or duty of inquiry.

5. Five-year archiving Records must be retained for at least five years after the product is placed on the market or exported. All DDS filings and supporting documentation, geolocation data, supplier KYC, risk assessments, and legal compliance evidence must be retained for five years and made available on demand to competent authorities during regulatory inspection. That means your batch records, mixed-batch documentation, delivery notes, and DDS reference linkages all need to be in a system that can retrieve them by batch number or DDS reference on short notice - not in a folder structure that only one person understands.

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If You Can Only Do Three Things Before 30 December 2026

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Application dates: 30 December 2026 for large and medium operators and traders; 30 June 2027 for micro and small enterprises. The mechanics above apply from day one of enforcement - there is no grace period for getting the chain-of-custody model right.