Introduction: Understanding the EU Deforestation Regulation (EUDR)

Introduction: Understanding the EU Deforestation Regulation (EUDR)

The EU Deforestation Regulation (EUDR) is a cornerstone of the European Union’s strategy to combat global deforestation and forest degradation driven by EU consumption. Replacing the former EU Timber Regulation (EUTR), the EUDR significantly raises the bar by expanding scope, traceability requirements, and enforcement mechanisms.

The regulation applies to seven commodities associated with high deforestation risk:

• Cattle (including leather)
  
  
• Cocoa
  
  
• Coffee
  
  
• Palm oil
  
  
• Rubber
  
  
• Soy
  
  
• Wood
  

as well as a wide range of derived and processed products.

The EUDR is explicitly designed as a dynamic framework: the European Commission may expand the list of covered commodities and products over time, based on impact assessments and scientific evidence.

Core compliance requirements under the EUDR

Any relevant product placed on or exported from the EU market must meet three cumulative conditions:

1. Deforestation-free
   Products must not originate from land deforested or degraded after 31 December 2020.
   
   
2. Legal production
   Products must comply with all applicable laws in the country of production, including land-use rights, environmental protection, labor rights, and the rights of Indigenous Peoples.
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3. Operators must submit a due diligence statement through the EU’s dedicated information system before placing products on the market.

A clear and binding definition of deforestation

The EUDR introduces a legally binding definition of deforestation:

Deforestation is the conversion of forest to agricultural use, whether human-induced or not.

A forest is defined as:

• An area larger than 0.5 hectares
  
• With trees higher than 5 meters
  
• And a canopy cover exceeding 10%
  

Forest degradation is also covered, notably through the conversion of primary forests or naturally regenerating forests into plantations or other wooded land.

The European Commission has indicated that other ecosystems not currently classified as forests (such as the Brazilian Cerrado) may be addressed through future legislative initiatives, but they are not yet included in the legal scope of the EUDR.

Due Diligence under the EUDR: A structured and mandatory process

The EUDR introduces a mandatory due diligence system for all operators and (in a lighter form) traders dealing with in-scope commodities and products.

This due diligence process consists of three sequential steps:

1. Information collection and traceability
   
   
2. Deforestation and legality risk assessment
   
   
3. Risk mitigation measures where necessary
   

A key ambition of the regulation is to standardize information sharing across supply chains and between companies and authorities. All due diligence statements are submitted via a centralized EU digital system, enabling traceability, audits, and enforcement.

1. Information collection and full traceability

To comply with the EUDR, operators must collect and retain precise, verifiable, and geo-referenced data, including:

• Product description (trade name, type, materials, and quantities)
  
• HS code and product category
  
• Country of production
  
• Exact geolocation (polygon or point) of all plots of land where the commodities were produced
  
  • For cattle: geolocation of all establishments where animals were raised
• Date or production period
• Name, postal address, and contact details of all suppliers
• Name, postal address, and contact details of downstream operators or traders
• Supporting evidence demonstrating:
  
  • Absence of deforestation or forest degradation after 31 December 2020
  • Compliance with applicable local laws

This information must be kept for at least five years and made available to competent authorities upon request.

2. Risk assessment: country benchmarking and supply chain analysis

Risk assessment under the EUDR combines EU-level country benchmarking with operator-specific analysis.

Country benchmarking system

The European Commission classifies countries (or parts thereof) into three risk categories:

• Low risk
  
• Standard risk
  
• High risk
  

This classification is based on deforestation rates, governance quality, law enforcement, and transparency.

Operators sourcing exclusively from low-risk countries benefit from simplified due diligence, though traceability and information collection obligations still apply.

Operator-specific risk factors

Regardless of country classification, operators must assess risks related to:

• Supply chain complexity
• Number and type of intermediaries
• Reliability and completeness of data
• Risk of product mixing or substitution
• Historical non-compliance by suppliers

3. Risk mitigation measures

If the risk assessment does not demonstrate a negligible risk, operators must implement effective and proportionate risk mitigation measures before placing products on the EU market.

These may include:

• Requesting additional documents or satellite evidence
  
• Independent third-party verification
  
• On-site audits or supplier assessments
  
• Strengthening contractual clauses and traceability systems
  

Products cannot be marketed until the risk is demonstrably reduced to negligible.

Controls, enforcement, and sanctions

EU Member States are responsible for enforcement and must conduct risk-based compliance checks, with increased scrutiny for high-risk countries and commodities.

Sanctions for non-compliance are severe and may include:

• Withdrawal, recall, or destruction of products
  
• Confiscation of revenues derived from non-compliant products
  
• Temporary exclusion from public procurement or EU funding
  
• Fines of up to 4% of annual EU turnover
  

Updated EUDR implementation timeline (post-delay)

Here’s the currently agreed timeline after the Council and European Parliament reached a deal on the regulation’s revision:

• 30 December 2026: New start date for EUDR compliance obligations for large and medium-sized companies (postponed by one year from Dec 30 2025).
  
  
• 30 June 2027: New start date for micro and small enterprises to comply (additional six-month cushion). 

Examples of products covered by the EUDR

Cattle and leather (non-exhaustive)

• Live bovine animals
  
  
• Raw hides and skins
  
  
• Tanned and crust leather
  
  
• Finished bovine leather products
  

Rubber (Non-exhaustive)

• Natural rubber and similar gums
  
  
• Unvulcanized and vulcanized rubber
  
  
• Rubber threads, tubes, sheets
  
  
• Rubber clothing and accessories
  

Wood and wood products (non-exhaustive)

• Firewood and rough wood
  
  
• Prefabricated wooden buildings
  
  
• Wooden kitchenware and furniture
  
  
• Wooden frames, ornaments, and marquetry
  

Content of a Due Diligence Statement

A due diligence statement must include:

• Operator identification and registration details
  
• Product description, HS code, trade name, and quantity
  
• Country of production
  
• Precise geolocation of all production plots
  
• Reference number of any previous due diligence statement (if reused)
  
• A legally binding declaration confirming:
  
  • Compliance with the EUDR
  • Negligible risk of deforestation and illegality