What Is EUDR? A Complete Guide to the EU Deforestation Regulation

The EU Deforestation Regulation (EUDR) is a new legislative framework introduced by the European Union to fight global deforestation and forest degradation. It establishes strict obligations for businesses to ensure that their products do not contribute to deforestation, even when such activities are considered legal in the country of origin.

This article explains what EUDR is, how it affects supply chains, and how companies can adapt their practices to comply. It’s designed for professionals, clients, and decision-makers who need a clear, factual overview of the regulation’s purpose, scope, process, and practical implications.

What Is the EU Deforestation Regulation (EUDR)?

The EUDR is a legal instrument aimed at minimizing the EU’s contribution to global deforestation and forest degradation, both legal and illegal. Approved in June 2023, it replaces the older EU Timber Regulation (EUTR) and expands the scope from just illegal logging to a wider range of activities and products that may cause deforestation.

EUDR at a Glance

The regulation applies to key commodities often linked to deforestation, including cattle, soy, palm oil, coffee, cocoa, rubber, and wood. It covers both goods produced in the EU and those imported into the EU market. The EUDR requires that these products be deforestation-free, legally produced, and traceable to the plot of land where they originated.

Why EUDR Matters

Deforestation is a major driver of climate change and biodiversity loss. The EU, as a significant importer of agricultural and forestry products, plays a critical role in influencing global supply chains. By setting a legal standard for deforestation-free products, the EUDR contributes to the European Green Deal’s broader goal of achieving climate neutrality by 2050.

Scope of the Regulation

This section outlines which products are affected and who is legally responsible for ensuring compliance with EUDR requirements. It also clarifies when the regulation applies, and how the production date influences whether goods fall under the EUDR scope.

Commodities and Products Affected

The regulation targets seven high-risk commodities:

• Cattle. Livestock farming, particularly in South America, is a major driver of deforestation due to pasture expansion.
• Cocoa. Cocoa cultivation in West Africa has contributed to forest loss and biodiversity decline.
• Coffee. Coffee farming often leads to forest clearance in tropical regions such as Latin America and Southeast Asia.
• Palm oil. Palm oil plantations are linked to large-scale deforestation, especially in Indonesia and Malaysia.
• Rubber. Rubber production contributes to forest degradation in parts of Asia and Africa.
• Soy. Soy farming, particularly in the Amazon and Cerrado regions, has caused extensive land conversion.
• Wood. Unsustainable logging practices directly result in forest degradation and habitat destruction.

In addition to these core commodities, the regulation applies to a wide range of derived products. This includes items such as meat, leather, chocolate, tyres, furniture, paper, pulp, and printed books. The exact scope is determined using the EU’s Combined Nomenclature (CN) system, which classifies goods by tariff codes.

EUDR applies to relevant goods produced on or after 29 June 2023, the date the regulation entered into force. However, there are exceptions. For instance, timber and timber products are covered by the EU Timber Regulation (EUTR) if produced before 29 June 2023 and placed on the EU market from 30 December 2025 to 30 December 2028. After this period, EUDR requirements will apply. For cattle and cattle-based products, the production date refers to the birth date of the animal. After 30 December 2028, all timber and timber-derived products, regardless of production date, will fall under the scope of the EUDR.

Understanding both the product classification and production date thresholds is essential for determining whether a product falls under EUDR requirements. Mistakenly assuming a product is out of scope due to the timing of trade rather than its production date can lead to compliance failures.

Who Must Comply?

EUDR obligations apply to:

• Operators: entities that place relevant products on the EU market or export them for the first time.
• Traders: actors within the supply chain who make these products available but are not the first to market.

Operators bear the primary responsibility for conducting due diligence and submitting official compliance declarations. Traders, depending on their size and function, may also be required to collect and retain relevant information. Larger traders face stricter obligations, while small and micro-enterprises benefit from simplified requirements.

Compliance deadlines are based on company size. Large businesses must comply by 30 December 2025, while micro and small enterprises have until 30 June 2026.

Although EUDR is an EU regulation, its influence extends globally. Suppliers and producers outside the EU may be required to provide detailed data and proof of traceability to meet the standards demanded by their EU clients. This means that transparency and accountability are expected throughout the entire supply chain, regardless of geography.

How Does EUDR Work? Core Requirements for Compliance

To meet EUDR requirements, companies must ensure that relevant products are deforestation-free, legally produced, and traceable to their exact source. These conditions must be verified before the products are placed on the EU market or exported from it. Businesses must also submit a formal due diligence statement confirming that there is no more than a negligible risk of non-compliance.

Deforestation-Free Criteria

A product is considered deforestation-free if the land used for its production has not been subject to deforestation or forest degradation after 31 December 2020, regardless of whether the activity was legal under the laws of the country of origin. 

This includes:

• Forest-to-agriculture conversion, whether human-induced or natural.
• Conversion of primary or naturally regenerating forests into plantations or other wooded land.

These definitions emphasize environmental impact over legal technicalities, reflecting the EU’s intention to address both legal and illegal deforestation. The regulation applies equally to products from within the EU and those imported from third countries.

Due Diligence Obligations

Companies placing relevant products on the EU market must establish and operate a structured due diligence system. 

This process includes:

• Information gatherin: collecting details such as product description, quantity, country of production, geolocation coordinates of land plots, supplier information, and documentation proving legal and deforestation-free origin.
• Risk assessment: evaluating the likelihood that a product may be non-compliant, based on factors such as the country of origin, prevalence of deforestation, complexity of the supply chain, and presence of indigenous communities or human rights risks.
• Risk mitigation: implementing proportionate measures if a risk is identified. This may involve requesting additional documentation, commissioning independent audits, changing suppliers, or strengthening internal controls.

All operators must submit a due diligence statement to the EU’s central information system before placing the product on the market. The statement must demonstrate that due diligence was conducted and that no more than a negligible risk was identified.

Risk Classification System

To help businesses assess risk levels more effectively, the EU will classify countries or regions into three categories:

• High risk: full due diligence required, with enhanced scrutiny and documentation.
• Standard risk: default level, with the full due diligence process required.
• Low risk: simplified due diligence may be used; risk assessment and mitigation steps are not mandatory.

This classification affects the depth of checks and level of documentation required. Companies sourcing from high-risk areas must apply the most robust controls and demonstrate a strong understanding of their supply chains.

As of now, the official list of country risk classifications has not been published. All countries are treated as standard risk until the list is adopted, which is expected by 30 June 2025.

How Businesses Can Prepare for EUDR

This section outlines practical actions companies should take to achieve compliance with the EU Deforestation Regulation. Given the upcoming deadlines 30 December 2025 for large businesses and 30 June 2026 for small and micro-enterprises early preparation is essential. Building a traceable and legally compliant supply chain requires a step-by-step approach and careful attention to risk management.

Step-by-Step Compliance Approach

To meet EUDR obligations, companies should adopt a structured, proactive process:

• Map your supply chain. Identify all relevant commodities and trace them back to their point of origin. Understanding the full structure of your supply network including intermediaries and raw material sources is the foundation of risk evaluation.
• Implement traceability systems. Use digital tools such as geolocation databases, blockchain platforms, or product-level QR tracking to verify that raw materials come from non-deforested land. These systems must be able to link each product to a specific plot of land.
• Assess risks. Evaluate each product and supplier for potential deforestation or legal non-compliance. Consider factors such as the country of origin, known deforestation rates, and the presence of high-risk areas or indigenous land rights.
• Mitigate identified risks. If a product is associated with moderate or high risk, companies must take appropriate action. This may include switching suppliers, demanding additional documentation, conducting third-party audits, or providing training for upstream partners.
• Maintain records and reporting. All relevant data must be retained for at least five years. This includes due diligence statements, supporting evidence, and any measures taken to reduce risk. Accurate and accessible documentation will be crucial during inspections by EU authorities.

Following this structured approach helps companies not only comply with the EUDR, but also build more resilient, transparent, and responsible supply chains.

Challenges and Common Pitfalls

Despite its benefits, EUDR implementation presents several challenges. Companies may encounter obstacles such as:

• Incomplete supplier data or lack of transparency.
• High administrative costs for setting up traceability infrastructure.
• Resistance from suppliers in high-risk regions.
• Legal and regulatory conflicts for instance, some jurisdictions may prohibit sharing geolocation data due to national data protection laws.

For example, companies sourcing from countries with strict privacy laws have addressed these issues by anonymizing spatial data while maintaining plot-level traceability. Others have developed contractual clauses requiring supplier cooperation on environmental disclosures.

To overcome these challenges, companies should consider the following practical strategies:

• Pilot traceability systems with select suppliers before full rollout.
• Collaborate with legal advisors to reconcile local data rules with EUDR demands.
• Engage with third-party platforms that specialize in geospatial compliance.
• Join cross-industry working groups to share data, tools, and best practices.

Taking action before regulatory deadlines reduces last-minute risks and ensures smoother adaptation to the EUDR framework.

Technology and Tools for EUDR Compliance

Technology plays a vital role in meeting EUDR requirements, particularly for companies dealing with complex or international supply chains. 

Key tools include:

• Blockchain-based traceability platforms. These systems can provide immutable tracking of material origin, helping companies verify supplier declarations and monitor product flows in real time.
• Satellite monitoring and deforestation alerts. Remote sensing tools can identify land-use changes and flag potential deforestation near sourcing areas.
• Digital product passports. These documents store verified compliance data that can be securely shared along the supply chain and with regulators.

While certifications and audits may support due diligence, they cannot substitute it. EUDR places the responsibility directly on operators to ensure compliance and demonstrate that risk is negligible. Technology should enhance not replace the company’s own due diligence systems.

Penalties and Enforcement

The EUDR includes significant enforcement mechanisms designed to ensure compliance across all levels of the supply chain. These measures are intended not only to punish violations, but to prevent environmental harm and encourage proactive due diligence.

How the Regulation Will Be Enforced

Each EU Member State is required to designate a competent authority responsible for monitoring compliance with the EUDR. These authorities will operate under a harmonized EU framework and have broad powers to investigate and enforce the regulation.

They are authorized to:

• Conduct on-site inspections without prior notice.
• Request corrective actions from non-compliant businesses.
• Investigate substantiated concerns submitted by individuals, NGOs, or other stakeholders.
• Block or confiscate goods that do not meet EUDR requirements.

In support of these efforts, a centralized EU information system will store and manage due diligence statements, allowing authorities to cross-reference declarations and coordinate inspections efficiently.

Consequences of Non-Compliance

Failure to comply with EUDR obligations can result in serious penalties. Competent authorities may impose sanctions if a company is found to have placed non-compliant products on the EU market or exported them without fulfilling due diligence duties.

Possible penalties include:

• Fines of up to 4% of the operator’s annual EU turnover.
• Confiscation of goods or the revenues obtained from their sale.
• Exclusion from public procurement procedures and access to public funding for up to 12 months.
• Temporary bans on placing the product on the EU market or using simplified due diligence procedures.

In addition to financial and administrative penalties, companies may be required to take corrective action. This may include withdrawing or recalling the product, donating it for non-commercial use, or disposing of it in accordance with EU waste management regulations.

These enforcement provisions underscore the importance of early preparation, strong traceability systems, and clear documentation to ensure full compliance with the EUDR.

Digital Tools for EUDR Compliance

EUDR.co supports businesses in meeting the complex demands of the EU Deforestation Regulation by providing an integrated, digital-first compliance platform. The solution streamlines key steps such as geolocation verification, supply chain mapping, risk assessment, and the submission of due diligence statements. Designed for companies of all sizes, the platform enables organizations to maintain transparency, traceability, and legal alignment throughout their global supply chains.

By combining automation with deep regulatory expertise, EUDR.co helps reduce operational burdens and ensures companies are audit-ready ahead of key deadlines. Whether managing a few sourcing regions or hundreds of farms, businesses can rely on the platform to efficiently demonstrate that their products are deforestation-free, legally produced, and fully compliant with EUDR standards.

Conclusion

The EUDR sets a new global standard for sustainable sourcing by ensuring that products entering or leaving the EU are free from deforestation and forest degradation. Its implementation will reshape supply chain dynamics, requiring businesses to invest in due diligence, traceability, and compliance infrastructure.

For professionals and decision-makers, understanding and acting on EUDR requirements is no longer optional – it’s essential. Complying with the regulation offers more than just risk avoidance. It positions businesses as leaders in sustainability, builds trust with stakeholders, and ensures continued access to one of the world’s largest markets.

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