Feb 14, 2025
The Simple Guide to EUDR (European Deforestation Regulation) Compliance
Stay compliant with EUDR and prepare for the deadline
Despite increased awareness of the consequences of deforestation, figures show that an area the size of Switzerland was lost from previously pristine rainforests in the Amazon in 2023. That is the equivalent of ten soccer fields disappearing every minute throughout the year. Driven by demand for resources such as cattle and rubber, as well as the products derived from them, like leather and tires, excessive forest degradation can lead to:
The destruction of habitats for plants and animals, causing biodiversity loss
Detrimental effects on millions of people who rely on forests for their homes or livelihood
Potentially disastrous changes to rainfall patterns
Decreased water and soil quality
Increased flood risk
The release of greenhouse gases
Regulation on Deforestation-free Products, also known as the European Deforestation Regulation or EUDR. This article explains what the regulation is, who it applies to, when it will come into force, and how you can prepare for EUDR compliance.
What is EUDR?
The European Deforestation Regulation was introduced in recognition of the fact that the EU is a major consumer of cattle, wood, cocoa, soy, palm oil, coffee, and rubber, as well as products made with those resources. These are often referred to as “the seven commodities” within the context of the regulation. The demand for agricultural land to house the production of these commodities is seen as a key reason for deforestation, making the EU partially responsible for the loss of forests across the world.
The regulation requires any party that brings these commodities to market in the EU to prove that they are not produced on land that has been recently deforested. It came into force on 29th June 2023 and will be applicable from 30th December 2025. The aims of EUDR are:
To ensure that European shopping habits do not contribute to deforestation
To reduce carbon emissions relating to EU consumption of the seven commodities by at least 32 million metric tonnes a year
To address forest degradation relating to the production of those commodities.
Who needs to comply?
The regulation applies to “operators” and “traders” who bring to market in the EU, make available to market in the EU, or export any “relevant commodities” or “relevant products” listed within Annex I of the EUDR. The products included are those produced using the seven commodities, most closely associated with deforestation.
These definitions will help you understand whether you fall within the scope of the European Deforestation Regulation:
An operator is a natural or legal person who places one of the relevant products onto the EU market or who exports them commercially. This applies to both businesses that import a relevant commodity or product and those that transform it into another relevant product. For example, both an EU company that imports and sells rubber and an EU company that buys the rubber from the first company and turns it into tires are classed as operators.
A trader is a company that markets relevant products but is not an operator. An example of this type of business is a supermarket or retail chain.
All operators and large traders are responsible for ensuring products placed on the market, made available, or exported are deforestation-free.
Operators and large traders must file a due diligence statement for their relevant products, although micro and SME operators do not need to exercise due diligence for products that have already been subject to due diligence (by an operator in their supply chain, for example) or submit a due diligence statement. However, they still need to provide due diligence reference numbers from whenever they were assessed in their supply chain.
Micro and SME traders do not need to file a due diligence statement.
EUDR compliance requirements
In-scope companies – those that place commodities or products mentioned in the regulation on the EU market or who export them – must meet a range of obligations under EUDR. These are:
Obligation | Explanation |
Due diligence | Operators must put in place a due diligence system to ensure that the commodities and products brought through their supply chains are not related to any recent deforestation, forest damage, or breaches of local environmental and social laws in their country of origin. For the purposes of the regulation, “recent” means post 31st December 2020.
This requires them to declare:
Companies should keep this information and documentation for five years from placing the item on the market or exporting it. Large companies should also report “as widely as possible” on their due diligence system and the steps they take to meet their obligations. |
Risk assessment | Using the information gathered in the due diligence process, the operator must make an assessment as to the risk that the products it wants to bring to market could be non-compliant. This includes:
|
Risk mitigation | The operator must put in place measures to ensure the risk of non-compliance is zero or negligible. This might include requesting additional documentation, carrying out audits of suppliers, and putting in place internal policies to manage risk effectively. |
Reporting | In-scope operators should submit their due diligence statement to the European Commission’s deforestation registry for checking by their EU member state’s national competent authority (NCA). |
When will it apply?
EUDR was initially set to apply from 30th December 2024, but it was delayed by a year to come into action on 30th December 2025. The rules will apply initially to medium and large operators and traders, before micro and small enterprises fall into scope on the 30th June 2026.
How to prepare for EUDR compliance
Identify relevant raw materials
The first step is to check whether you are likely to be within the scope of the regulation. Check Annex I of EUDR to understand which commodities and products apply.
In some cases, it will be obvious that you are liable. For example, if you are an EU importer of cocoa. However, a chain of food retailers will have to understand the range of different relevant products that it stocks. This includes chocolate, coffee, beef, and many more items likely to be on the shelves of supermarkets.
This process will allow you to understand the scale of the task ahead of you.
Map supply chains
To understand the risk that each product carries of a connection with forest degradation, you need to gain an overview of your supply chain. The European Commission will produce a benchmarking system, rating countries as high, standard, and low risk, which will help guide your due diligence once you understand where your products originate from.
Within each country of origin, you need to identify the regions from which you source commodities and the processing facilities to understand how likely your products are to meet the requirements of the legislation.
Consult with suppliers and request information on upstream supply chain entities to ensure compliance.
Assess deforestation risks and collect documentation
Once you understand the relevant products used within your business and the nature of the supply chain bringing them to you, you can look into how likely it is that any of the products have been produced as a result of recent agricultural expansion into forests.
At this point, you should collect the relevant documentation for your due diligence process. Get hold of the geolocation data for the place in which the raw materials originate and consult with your supply chain to gain certifications and declarations to prove compliance. This evidence will be key to showing that you have done all you can to mitigate risks.
Implement a traceability system
Transparency is key to understanding exactly what goes on in your supply chain, and this traceability is key to adhering to laws such as EUDR, the Conflict Minerals Regulation, and similar legislation regarding the supply of sensitive materials.
Make sure you can maintain an overview of your supply chain by engaging suppliers, using real-time data to understand what is happening, and being able to respond proactively when issues arise or something doesn’t look right. Not only should you ensure your supply chain is compliant at the time of your due diligence, but you also need to monitor it to maintain that status.
Verify supplier compliance
If you do suspect that something is not right in your supply chain and that there is a risk that some of the materials you are receiving might not meet the remit of EUDR, it is essential that you act and investigate immediately. It is your responsibility as the party bringing the product to market in the EU to make sure that it is compliant.
This may require implementing a third-party audit on suppliers in your chain. Verification from these entities helps to provide peace of mind that the chain is operating as it should be, in a compliant manner.
Update contracts
The contracts you enter into with your suppliers are the keys to an effective, compliant, and efficient supply chain. So, it makes sense that you put down in writing your expectations regarding EUDR compliance.
By articulating this in a binding contract, you instill accountability into the process and put the onus on the supplier to ensure that they work in a compliant manner. In turn, they will work with their suppliers to meet the obligations for sourcing products that do not originate from new deforestation.
Enforcement and penalties
NCAs in EU member states are tasked with enforcing EUDR for companies in their jurisdiction. This allows them to carry out audits on relevant commodities and products to ensure they meet the requirements of the regulation and to check due diligence statements.
They are empowered to carry out spot checks and field audits in their own country and in those of suppliers too (with the permission of those countries’ authorities).
NCAs can check documentation and records held by the company, reclaiming the costs of investigating products and commodities from non-compliant operators and traders.
In line with the European Commission‘s tough stance on non-compliance with environmental matters, Article 24 of EUDR allows NCAs to “require the [non-compliant] operator or trader to take appropriate and proportionate corrective action to bring the non-compliance to an end within a specified and reasonable period of time.” They can also issue “effective, proportionate and dissuasive” penalties, such as fines, confiscation of products, exclusion from public procurement processes, and other such actions.
Challenges of EUDR compliance
There are cost implications for businesses. For example, when conducting audits to help them maintain compliance or when hiring employees and contracting consultants to track and report on the origins of all relevant products and commodities.
Introducing new operational workflows will be disruptive to some businesses too, stretching resources and requiring additional training programs.
Collaborating with suppliers might not be easy for some companies who are not used to a close relationship. It will require implementing engagement strategies to create a closer relationship where there is a free flow of information.
Tracing the origins of commodities is not always straightforward. Some of these products are the result of complex processes and there is not always readily available geolocation information regarding the source of some commodities.
FAQ
What is the difference between EUTR and EUDR?
EUTR is the EU Timber Regulation, an earlier attempt at protecting forests. It focuses solely on preventing illegally harvested timber and timber products from being placed on the EU market. EUDR is more wide-ranging, covering more commodities, and will replace EUTR on implementation.
Who is the supervising authority regarding EUDR?
Under the EU Deforestation Regulation, each EU Member State designates its own competent authority responsible for enforcement, while the European Commission provides overall guidance, coordination, and oversight at the EU level.
Does recycled paper/paperboard fall under the scope?
Purely recycled paper or paperboard (containing no virgin wood fiber) generally falls outside the scope of the EU Deforestation Regulation (EUDR), because the regulation targets commodities and products derived from newly harvested materials linked to deforestation. However, if there is any non-recycled material within the paper or paperboard, it would need to be traced back to its point of origin.
Conclusion
EUDR compliance relies heavily on the relationship that operators and traders have with their supply chains. Greater visibility will make the process of finding data on the origins of commodities and their compliance status much more simple and efficient.
To simplify this process, Beebolt is building the first collaboration platform for global business. It provides a central location for all communication between your business and your suppliers, allowing you to monitor the performance of the chain and collaborate more effectively and transparently.
Implementing Beebolt leads to a closer and more trusting relationship where you can discuss your requirements and solve issues in a timely manner. Talk to an expert about how Beebolt can help your business comply with EUDR today.
