On 29 June 2023, the EU Regulation on Deforestation-Free Products (EUDR)[1] came into force, with an initial effective date set for 30 December 2024. However, in December 2024, the EU granted a 12-month extension,[2] making the law applicable one year later: 30 December 2025 for large companies and 30 June 2026 for micro and small enterprises.
The EUDR is designed to prevent deforestation and forest degradation driven by EU demand for certain commodities.
It requires companies placing any of the relevant commodities or products on the EU market, or exporting from it, to demonstrate that their products neither originate from deforested land nor contribute to forest degradation.
In the context of the EUDR, forest degradation refers to “[…] the conversion of: (a) primary forests or naturally regenerating forests into plantation forests or into other wooded land; or (b) primary forests into planted forests”.[3] Deforestation is defined as “the conversion of forest to agricultural use, whether human-induced or not”.[4]
The EUDR replaces the EU Timber Regulation[5], which was adopted in 2010 to combat illegal logging and illegal trade of timber products. While the previous regulation focused exclusively on illegality, the scope of the EUDR extends further to tackle deforestation and forest degradation, even when the underlying activity is legally permitted.
This means that even if deforestation or forest degradation is caused by activities deemed “legal in accordance with the laws of the country of production”[6], companies are still required to demonstrate that their products are not linked to deforestation or forest degradation.[7]
5 Things Businesses Should Know to Meet EUDR Requirements:
1. The Scope: The EUDR applies to seven commodities and a wide range of derived products.
The EUDR covers seven “relevant commodities” – cattle, cocoa, coffee, palm oil, rubber, soy and wood[8] – along with several “relevant products” listed in Annex I of the Regulation. These products include meat products, chocolate and other food preparations containing cocoa, coffee, derivates of palm oil, glycerol, industrial fatty alcohols, rubber products, (such as plates, sheets, and tyres) soybeans, soybeans flour and oil, fuel wood, wood products, pulp and paper, printed books and newspapers.
These products are classified according to the EU’s Combined Nomenclature tariff classification.
The EUDR applies to goods produced on or after 29 June 2023, with the exception of timber and timber products, which are covered even if produced before this date, provided they are placed on the market from 31 December 2027.[9] For cattle, the relevant production date is the birth date, meaning the EUDR does not apply to cattle or cattle products from animals born before 29 June 2023.[10]
2. The Ban: The EUDR is not a blanket prohibition. It allows companies to place or export relevant commodities and products on the EU market if certain conditions are met.
The EUDR bans the placing or making available of relevant commodities and products[11] in the EU market or their export unless all of the following conditions are met:[12]
- Deforestation-free: Products must have been produced on land that has not been subject to deforestation (or forest degradation, for products containing or made from wood) after 31 December 2020.[13]
- Compliance with domestic legislation: Products must be produced in accordance with the relevant laws of the country of production, including land use rights, labor rights, environmental protection, forest-related rules, human rights protected under international law, and the principle of free, prior, and informed consent (FPIC).[14]
- Due diligence statement: Companies must provide a statement confirming due diligence was conducted, with no or only negligible risks of deforestation (i.e., no cause for concern). This statement must include all relevant information set out in Annex II of the EUDR and should be submitted to the competent authorities before placing the relevant product on the EU market or exporting it.[15]
3. The Obligation: In-scope companies must conduct due diligence to demonstrate their products are deforestation-free and legal.
Companies subject to the EUDR (in-scope companies) are classified as operators (those placing relevant products on the market or exporting them) or traders (those in the supply chain that make relevant products available on the market, excluding operators).
For operators and large traders, due diligence must entail:
- Gathering relevant information:[18]
This includes a description of the relevant commodities such as quantity, country of production, geolocation of land plots, identification of the businesses or individuals supplying or receiving the products, and information confirming that the products are deforestation-free and produced in accordance with domestic laws. - Conducting a risk assessment:
Companies must assess the risk of non-compliance for each product, considering factors[19] such as the presence of Indigenous Peoples, the prevalence of deforestation or forest degradation, and the three-tier country risk classification (high risk, low risk or standard risk), to be established by the EU Commission.[20] - Adopting risk management measures:
These may include independent surveys or audits, requests for additional information, or collaboration with suppliers on capacity building and investments.[21] Simplified due diligence is sufficient for products from countries or regions classified as low risk based on the EU Commission’s classification, which means no risk assessments or mitigation measures are required.[22] - Reviewing the due diligence system:
Companies must review their due diligence processes at least annually and on an ad-hoc basis. - Reporting annually:
Companies must report on their due diligence every year, including on steps taken to implement EUDR obligations. Reporting under other EU due diligence regulations may fulfil this requirement[23] if it includes the information necessary under the EUDR.
SME traders are required only to collect and retain all relevant product information for at least five years.[24]
4. The Enforcement: Authorities will follow a risk-based approach for their assessments.
Competent authorities responsible for enforcing the EUDR in EU member states are expected to adopt a risk-based approach when determining which checks to conduct on companies and non-SME traders within their jurisdiction. The following factors must be considered:[25]
- The relevant commodities
- The complexity and length of supply chains, including information on whether mixing was involved and the processing stage of the relevant product
- The proximity of land plots in question forests
- The country’s risk level, based on the classification system to be established by the EU Commission, with special attention on high-risk countries
- The company’s history of non-compliance with the EUDR and risks of circumvention
- Any other relevant information
In their assessment, enforcement agencies will consider information provided by companies under the EUDR due diligence and reporting obligations, as well as data from the information system to be established by the EU Commission. [26] Additional relevant sources may include monitoring data, risk profiles from international organizations, substantiated concerns submitted to the competent authorities by individuals or legal entities[27], and insights from EU Commission expert group meetings.
In the case of products with a high-risk of non-compliance, authorities may request immediate remedial action, such as interim measures to EU market entry.[28]
5. The Penalty: Non-compliance with EUDR will result in penalties.
Where non-compliance with EUDR is identified, operators or traders are required to take “appropriate and proportionate corrective action to bring the non-compliance to an end”[29] within a reasonable timeframe.
Corrective action must include at least one of the following:
- Rectifying formal non-compliance
- Preventing the relevant from being placed or made available on the market or being exported
- Withdrawing or recalling the relevant product immediately
- Donating the relevant product for charitable or public interest purposes, or if this is not possible, disposing of it in accordance with EU waste management laws
Penalties for non-compliance will be determined by member states and must be “effective, proportionate and dissuasive”.[30] Potential penalties include:
- Fines proportional to environmental damage and the value of the items, with fines increasing for repeated infringements, up to a maximum of 4% of the operator’s EU turnover in the preceding year. Fines may be further increased to exceed any potential economic benefit gained from non-compliance.
- Confiscation of relevant products or the revenues generated from them
- Temporary exclusion from public procurement processes and access to public funding (for up to 12 months)
- In cases of serious or repeated infringements, a temporary ban on placing or making available on the market or exporting the relevant products or a ban on using the simplified due diligence process
Four Key Steps for Effective EUDR Implementation:
To effectively implement the EUDR, companies must conduct due diligence. The following practical recommendations outline key actions that can help businesses prepare for the EUDR and navigate the complexities of maintaining deforestation-free supply chains.
1. Map your supply chain against the EUDR commodities and relevant products
The first step is to map your supply chain and identify the relevant commodities and products that fall under the scope of the EUDR, based on the tariff classification of the EU’s Combined Nomenclature.
2. Increase transparency and traceability of the commodity and/or product supply chain
A significant challenge for companies, especially downstream ones, is the lack of traceability in their supply chains to ensure relevant commodities are deforestation-free. Companies should explore available tools and data to assess risks at the scale of key sourcing areas or at production level. This also requires engaging with suppliers to improve traceability and establish a clear view of sourcing practices.
3. Assess your current business models and purchasing practices
Ensuring deforestation-free supply chains is a gradual process that may require a shift in business strategy. Companies must critically evaluate their current business models and procurement practices and address opaque supply chains that hinder traceability. Models of direct sourcing from cooperatives or smallholder farmers allow for greater supply chain traceability and more leverage over production conditions. Such sourcing approaches can also contribute to forest conservation, for example, by offering premium payments to producers and cooperatives that avoid deforestation.[31]
Ultimately, companies must assess whether their sourcing models and volume strategies for certain commodities or products contribute to deforestation and forest degradation. They should also evaluate the extent to which they can reduce this impact (e.g., by decreasing sourcing volumes of paper-based single use packaging and investing in innovative packing designs).
4. Evaluate the use and reliance on certifications.
As highlighted in our CORE message on certifications and audits, while audits and certifications can complement corporate due diligence efforts, they cannot replace a company’s obligation to conduct meaningful human rights and environmental due diligence. Companies should carefully assess when and how audits and certification schemes can be effective mechanisms to tackle the risk of deforestation.
Cecilia for the CORE team
[1] The Regulation 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010. Available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023R1115&qid=1687867231461
[2] See Regulation (EU) 2024/3234 of the European Parliament and of the Council of 19 December 2024 amending Regulation (EU) 2023/1115 as regards provisions relating to the date of application. Available at https://eur-lex.europa.eu/eli/reg/2024/3234/oj
[3] Art. 2 (7) of the EUDR
[4] See Art. 2 (3) of the EUDR
[5] “For timber products produced before the entry into force of the EUDR on 29 June 2023, the EUTR will continue applying until 31 December 2027. For other products and timber products produced after entry into force of the EUDR, the EUTR will be repealed when the EUDR enters into application”. See
[6] Recital 33 of the EUDR
[7] Recital 34 of the EUDR
[8] Art. 2 (1) of the EUDR
[9] See Art 1 (2) and Art. 37 (3)
[10] See European Commission, Frequently Asked Questions Implementation of the EU Deforestation Regulation Version 3 – October 2024, Question 8.3
[11] Art. 2 (16) ‘placing on the market’ means the first making available of a relevant commodity or relevant product on the Union market; (Art. 2 (18): ‘making available on the market’ means any supply of a relevant product for distribution, consumption or use on the Union market in the course of a commercial activity, whether in return for payment or free of charge’
[12] Art. 3 of the EUDR
[13] Art. 2 (13) of the EUDR
[14] See Art. 2 (40) of the EUDR
[15] See Art. 4 (2) of the EUDR
[16] See Art. 2 (15) of the EUDR.
[17] See Art. 2 (17) of the EUDR
[18] Art. 9 of the EUDR
[19] Art. 10 of the EUDR
[20] See Art. 29 of the EUDR
[21] Art. 11 of the EUDR
[22] Art. 13 of the EUDR
[23] Art. 12 (3) of the EUDR
[24] Art. 5 (3) of the EUDR
[25] Art. 16 (3) of the EUDR
[26] Art. 33 of the EUDR
[27] Art. 31 of the EUDR
[28] Art. 17 of the EUDR
[29] Art. 24 of the EUDR
[30] Art. 25 of the EUDR
[30] See GCBHR, “Case Study: Sourcing sustainable rubber: Veja’s business model to help save the Amazon” (2023) at https://gcbhr.org/backoffice/resources/case-studyveja.pdf
