What is the EU Deforestation Regulation (EUDR)?
The EUDR establishes requirements for organisations placing certain commodities and products on the EU market, making them available within the EU, or exporting them from the EU. Its primary objective is to reduce the EU’s contribution to global deforestation, forest degradation, biodiversity loss and greenhouse gas emissions.
The regulation applies to seven commodities:
- Cattle
- Cocoa
- Coffee
- Palm oil
- Rubber
- Soya
- Wood
Also in scope are products derived from core commodities, including furniture, chocolate, leather, paper and rubber products.
To be compliant, products must be “deforestation-free”. This means that relevant commodities must not have been produced on land subject to deforestation after 31 December 2020. For wood products, the regulation also requires that harvesting has not caused forest degradation after that date.
Who does EUDR apply to?
The EUDR applies to operators and traders involved in placing relevant products on the EU market, making them available within the EU market, or exporting them from the EU. This includes organisations involved in importing, producing, processing, distributing or selling products containing or derived from cattle, cocoa, coffee, oil palm, rubber, soya and wood.
Requirements vary according to an organisation’s role in the supply chain and company size, but all in-scope businesses must maintain appropriate records and demonstrate compliance where required. Businesses both within and outside the EU may be affected where products enter EU supply chains.
What are the key requirements?
Before relevant products can be placed on the EU market or exported, organisations must demonstrate that they are:
- Deforestation-free;
- Produced in accordance with the relevant legislation of the country of production; and
- Covered by a due diligence statement.
Products may only be placed on the market or exported where due diligence concludes that there is no more than a negligible risk of non-compliance.
Businesses must:1
- Submit a Due Diligence Statement (DDS) through the EU Information System (based on TRACES) before placing relevant products on the EU market or exporting them.
- Keep supporting documentation and evidence available for inspection by the relevant national Competent Authority in the EU Member State where they operate.
- Provide information to customs authorities when goods are imported or exported, including the DDS reference number linked to the shipment. Customs use this information alongside EUDR controls
What are the timelines and deadlines for EUDR?
The EUDR entered into force on 29 June 2023. Following subsequent amendments, application dates have been postponed from the original implementation timetable.
Current application dates are:
- 30th December 2026 for large and medium-sized operators and traders;
- 30th June 2027 for certain micro and small enterprises.2
Given the complexity of supply chain mapping, supplier engagement and traceability requirements, organisations should use the additional preparation period to establish due diligence systems, collect supplier information and address any data gaps. Organisations should monitor European Commission guidance and updates from relevant Competent Authorities as implementation continues to develop.
What are the risks of non-compliance?
Failure to comply with the EUDR may result in significant commercial, financial and operational consequences established by Member States. This may include:
- Financial penalties (maximum fines of at least 4% of annual EU-wide turnover).
- Confiscation of products;
- Confiscation of revenues obtained from relevant products;
- Product withdrawal or recall;
- Temporary exclusion from public procurement processes or public funding opportunities.
Beyond regulatory penalties, organisations may face supply chain disruption, reputational damage, loss of customer trust and scrutiny from investors and stakeholders if unable to demonstrate responsible sourcing practices.
What are the business opportunities?
While compliance is the immediate priority, EUDR preparation can also deliver wider business benefits.
Organisations can strengthen supply chain resilience, improve transparency and respond to growing stakeholder expectations regarding sustainable sourcing.
By developing stronger traceability systems and engaging suppliers more closely, businesses can gain greater visibility of sourcing risks, improve data quality and identify opportunities to reduce environmental impacts across their value chains.
Early preparation can help organisations:
- Strengthen supplier relationships;
- Improve risk management;
- Enhance reporting and sustainability data;
- Meet customer and investor expectations;
- Demonstrate responsible sourcing leadership.
The information and systems developed for EUDR compliance can also be used to support broader biodiversity, ESG and due diligence objectives.
How should organisations prepare?
Organisations should start by identifying whether any products, materials or commodities within their operations fall within the scope of the regulation.
Key preparation activities include:
- Conducting an EUDR applicability assessment;
- Mapping supply chains and sourcing locations;
- Identifying required geolocation data;
- Assessing existing traceability systems;
- Establishing due diligence processes;
- Conducting supplier engagement and data collection exercises;
- Identifying risks and implementing mitigation measures;
- Reviewing internal governance and compliance arrangements.
Given the extensive information requirements, early supplier engagement will be critical to successful compliance.
What is the UK equivalent to EUDR?
The UK’s closest equivalent to the EUDR is the Forest Risk Commodities (FRC) due diligence regime established under Schedule 17 of the Environment Act 2021. Once fully implemented, certain larger businesses using regulated forest-risk commodities in their UK operations will be required to undertake due diligence and report annually on their systems and compliance. The UK Government’s current policy proposal is that the regime would apply to:
- Businesses operating in Great Britain that have annual turnover exceeding £1 million; and
- Businesses that use specified forest risk commodities or covered wood products in their commercial activities.
Commodities expected to be covered in the FRC align with EUDR. However, unlike the EUDR – which requires products to be both deforestation-free and legally produced – the UK regime focuses on preventing the use of commodities produced on land that was illegally occupied or used under local laws in the country of origin. As a result, the UK framework is generally narrower in scope than the EUDR.
Businesses operating across both UK and EU markets may therefore need to comply with two related, but distinct regulatory regimes.