Curbing the illegal timber trade by tracing the supply chain

Regulations such as the European Timber Regulation (EUTR) provide the legal tools to punish participants in the illegal timber trade worldwide. They require all economic operators to prove the legality of their timber. While these types of regulations aim to curb the illegal timber trade even in less regulated markets, they are largely toothless for lack of supply chain traceability. As a result, forests are overexploited, threatening the ecological balance. For example, the root system of trees protects forests from soil erosion and thus the surrounding area from flooding. This is reason enough for the four founders of Beetle ForTech to fight the illegal timber trade with a software-as-a-service solution and hardware for log traceability. In this installment of our Start-up-of-the-Day series, two of the founders, Koimé Kouacou and Anh Nguyen, talk about their project and the challenges of starting up a company:

What does your log traceability solution look like?

Koimé: On the one hand, there is the software and, on the other hand, a marking and a readout device. The marking is with contaminant-free codes immediately after the tree is felled by the woodworkers in the forest. This code can then be read up to the point of initial processing to verify the origin and additional data on the log. In a fully automated process, satellite images of the exact growing location of the tree can then still be compared to see that there is a gap in the forest canopy at that position.

What are the next steps?

Koimé: To date, there are several prototypes and some funding is still needed to reach product maturity. We also plan to add more digital services to meet the needs in the forest as well as those of the wood processing industry. One is a risk assessment tool and the other a forest monitoring tool.

The risk assessment tool is designed to make it easier for wood procurement departments to prove legality in accordance with globally applicable laws. With the forest monitoring tool, we enable forestry companies to assess the general condition of their forest on a remote sensing basis.

To be largely tamper-proof, we have divided different sub-aspects into individual units. The task now is to combine these sub-aspects into one device and to connect all systems via one platform.

What problem are you solving – and why is it important?

Anh: We want to provide supply traceability to wood processing companies so they can remove illegal wood from their supply chains. Timber supply chains are very complicated and vary from country to country and continent to continent. But in general, it is very easy to smuggle illegal timber into the supply chain.

In contributing to the fight against the illegal timber trade, our primary concern is climate protection. Forests are important for the climate and ecosystem. Ultimately, the illegal timber trade also threatens our livelihoods.

Besides, illegal timber trade is unfair to those companies that buy timber from sustainable sources. We want to prevent this and empower sustainable companies; also because there is currently high consumer demand for wood from certified sources.

Koimé: Plus, illegal logging damages the image of wood as a renewable resource. That’s also something to fight against, because wood is a brilliant material.

Was there ever a moment when you wanted to give up?

The biggest challenge was starting with a concept at the hackathon – and then launching a start-up without much funding in the background. It takes a lot of effort to really push this forward on your own and then convince funding bodies that the idea makes sense and is also technologically feasible. But there has never been a moment when we wanted to give up.

What achievements have made you really proud?

It feels good to get recognition and win awards, such as the Galileo Masters and the Copernicus Masters from the European Space Agency, as well as recently being accepted into the Greenstart program from the Austrian Climate and Energy Fund. Last year, we also pitched at the Europe-wide Falling Walls competition in Berlin. There you can exchange ideas and build on the experience of others – and the content provided is also very helpful. The patent application for our marking technology in June 2022 was also a success.

What are the conditions like at your location?

Koimé: Austria is a good starting point for Beetle ForTech. It is one of the largest importers of logs in the world and many Austrian companies in the timber industry are active worldwide. But the Netherlands and South America, for example, are also important markets. Our solution is designed to be used worldwide and we already have partners on all continents for the development of our forest monitoring so we can take into account individual conditions in forests.

Where would you like to be with Beetle ForTech in five years?

Koimé: In five years, we will not yet have established a monopoly in the area of traceability for logs (laughs). But by then, we want to make it so that companies that want follow the rules can do so with our solution in a tamper-free, scalable way.

What is your ultimate goal?

Koimé: Almost all team members of Beetle ForTech come from the wood sector. That’s why we have an emotional attachment to wood as a material and want to see wood substitute petroleum-based products. Wood is a limited resource and traceability simply has to be there so that overuse doesn’t happen. That is our vision.

What makes your innovation better or different from existing things?

Koimé: In existing solutions, the origin is either determined on a random basis using laboratory analysis, for example, or document-based proof of origin is simply provided. But fully automated traceability of individual logs to the exact growing location does not yet exist on the market.