EUDR: What companies should know about the new EU deforestation regulation

Global deforestation is one of the greatest threats to our climate, biodiversity and the livelihoods of millions of people. To address this challenge, the European Union adopted a new EU regulation in May 2023 to restrict trade in products related to deforestation and forest degradation. This regulation, also known as the EUDR (EU Deforestation Regulation), requires companies to demonstrate that, as of 30 December 2025, their supply chains are free of products that contribute to global deforestation.

The aim of the EUDR is to prevent the import of products into the EU market that contribute to global deforestation. In particular, the regulation concerns raw materials such as palm oil, soy, coffee, cocoa, beef (meat), rubber and woodbut also processed products containing these raw materials, such as chocolate, paper or furniture. The EUDR requires companies to ensure that all affected products have clearly not caused deforestation and comply with the legal requirements of the country of production.

The EU contributes significantly to global deforestation because there is a demand in the Union for many agricultural products from deforested areas. Not only are forests an important reservoir of CO2 and habitat for many animal species, they are also the basis of life for many indigenous peoples. The EUDR is intended to help stop the conversion of forests to agricultural land and reduce the pressure on natural resource extraction. Another important aspect is the protection of biodiversity and the prevention of illegal displacement of communities and indigenous peoples.

The EUDR applies to various commodities and their derivatives, including:

• Palm oil
• Soy
• Coffee
• Cocoa
• Beef (but not milk)
• Rubber
• Wood products (including paper, furniture, charcoal)

These products must be or free from deforestation, or include a detailed due diligence statement that proves that deforestation did not lead to the product. It does not matter whether the products were produced in the EU or in other countries - the EUDR applies worldwide.

What requirements are placed on companies?

Companies must prove that their products meet the following conditions:

1. Non-deforestation: raw materials must not come from land where deforestation has taken place after 31 December 2020. Furthermore, logging must be carried out in a way that does not harm the forest ecosystem.
2. Compliance with the legislation of the producer country: In addition to EU requirements, manufacturers must comply with the national environmental, labour and human rights legislation of the producing country.
3. Due diligence statement: The companies' main obligation is to draw up and submit a due diligence declaration. In this declaration, companies must demonstrate that they have gathered all relevant information on the origin and production methods of their products and that the risks of deforestation and forest degradation have been assessed.

Companies that place raw materials or products on the EU market must ensure that their products are free from deforestation through a three-step due diligence process:

1. Information gathering: Companies need to collect product information such as origin, quantity and production methods. Geolocation data are used, among other things, to trace the origin of raw materials.
2. Risk assessment: Based on the data collected, companies must carry out a risk assessment. Whether the product comes from a country with a high risk of deforestation is taken into account. Products from high-risk countries are subject to stricter requirements that require more detailed analysis and additional risk mitigation measures.
3. Risk mitigation: Once a company identifies the risk of deforestation, it must take steps to reduce this risk. This can be done by switching to more sustainable sources of raw materials or by controlling suppliers.

The EUDR will enter in life in stages:

• From 30 December 2025.: The regulation applies to large and medium-sized enterprises.
• From 30 June 2026.: Small and micro enterprises will also have to comply with the EUDR.

This approach aims to give companies sufficient time to prepare for the new regulations. Companies must submit due diligence statements and all relevant documentation through the EU TRACES digital information system.

While the EUDR is an important step towards protecting the world's forests, there are also challenges and criticisms around it. Some companies are concerned that the additional documentation requirements and associated bureaucracy will mean considerable effort. Small companies in particular face the challenge of implementing extensive requirements without the necessary infrastructure.

Furthermore, it is uncertain exactly how the various requirements will be implemented and how the regulation will affect companies' procurement costs. It remains to be seen how the regulation will affect international trade, especially if companies in less regulated countries can resort to less stringent regulations.

Companies need to prepare for the new regulations by being transparent about their supply chains and ensuring that all relevant data on the origin and production of their products is available. To comply, companies should take steps to vet their suppliers and document their due diligence obligations at an early stage.

EUDR ensures that companies operate in a more sustainable manner in the long term and take responsibility for their supply chains. Those who adapt in time can not only make sure they meet the new requirements, but also actively contribute to environmental protection.

EU Deforestation Regulation (EUDR) is a key step in the fight against global deforestation and poses new challenges for businesses. From 2025, companies will not only have to place non-deforestation products on the EU market, but also provide extensive evidence of the origin and sustainability of their products. This regulation helps to protect forests and their biodiversity worldwide and to combat global climate change.

Companies that prepare for EUDR requirements at an early stage have a clear competitive advantage when it comes to implementing sustainable supply chains.

We encourage you to read the article EUDR, or what do forests, consumption and EU regulations have in common? >>