EUDR: EU Deforestation Regulation

EUDR: the regulation that makes deforestation a market-access issue

The EU Deforestation Regulation (EUDR, Regulation (EU) 2023/1115) prohibits the placing on the EU market — or export from the EU — of a defined list of commodities and derived products unless they are deforestation-free, produced in accordance with the relevant legislation of the country of production, and covered by a due-diligence statement lodged in the EU information system.

EUDR is the first major EU environmental regulation to bind on geographic origin rather than product design. It does not care what your product does; it cares where its raw materials came from, when the land was cleared, and whether you can prove it. That makes it uniquely close to the Digital Product Passport in operational impact: both require supplier-side geolocation and chain-of-custody data that most brands have never had to collect.

• Entered into force 29 June 2023
• Application delayed by twelve months in December 2024; now applies from 30 December 2025 for large operators and traders, 30 June 2026 for micro and small enterprises
• Bans placing on the market of covered commodities linked to land deforested after 31 December 2020
• Applies to both EU-produced and imported commodities — no favoured treatment for domestic supply
• Enforced through a mandatory EU Information System where operators file due-diligence statements before placing goods on the market

The commodities and products in scope

EUDR covers seven raw commodities and a long list of products derived from them. The scope is deliberately wide — it captures both the raw material and the downstream products where the material forms a meaningful part.

• Cattle — live animals, beef, hides and leather, tallow
• Cocoa — beans, paste, butter, powder, chocolate
• Coffee — green beans, roasted beans, ground coffee, extracts
• Oil palm — palm oil, palm kernel oil, derivatives used in food, cosmetics and detergents
• Rubber — natural rubber, tyres, conveyor belts, gloves, condoms, hoses
• Soya — beans, flour, oil, cake used in animal feed
• Wood — logs, sawn wood, panels, pulp, paper, printed matter, furniture, joinery, fuelwood, charcoal

Deforestation-free and the 31 December 2020 cut-off

A product is 'deforestation-free' under EUDR if the commodity was produced on land that was not deforested after 31 December 2020 and, for wood specifically, if harvesting has not caused forest degradation after that date. Deforestation is defined against the FAO benchmarks — conversion of forest to agricultural use — and forest degradation covers structural changes to primary and naturally regenerating forests.

The cut-off is absolute. A plot cleared on 1 January 2021 is permanently out of scope for EUDR-compliant supply, regardless of how the land is farmed today. That is what forces the geolocation and satellite-monitoring workload the regulation triggers: proving a negative — no deforestation on this plot in the last four-plus years — requires geospatial evidence that most agricultural supply chains have never generated.

Due diligence: the three-step obligation

Every operator (the entity first placing the commodity or product on the EU market) and, for large enterprises, every trader down the chain must exercise due diligence before placing goods on the market. Due diligence has three components: information gathering, risk assessment and risk mitigation. All three must be documented and made available to competent authorities.

• Information gathering — commodity description, quantity, country of production, geolocation coordinates of *every* plot of land where the commodity was produced (down to a polygon for plots over 4 hectares), production period, supplier and buyer information
• Risk assessment — assess the risk that the commodity is non-compliant, using country-benchmarking (each country is classified low, standard or high risk), complexity of the supply chain, presence of forests in the production area, and any credible third-party evidence
• Risk mitigation — where risk is not negligible, take further steps to reduce it: additional information, supplier audits, independent verification, or excluding the batch from the EU-bound supply

The country-benchmarking system

The Commission classifies every producing country (and sub-national jurisdiction where relevant) as low, standard or high risk of producing non-compliant commodities. The classification determines the intensity of due diligence and the frequency of competent authority checks.

• Low risk — simplified due diligence: information gathering only, no risk assessment or mitigation required, minimum 1% of operators checked per year
• Standard risk — full three-step due diligence, minimum 3% of operators checked per year
• High risk — full three-step due diligence with enhanced scrutiny, minimum 9% of operators and 9% of the volume placed on the market checked per year

The due-diligence statement and the EU Information System

Every batch of commodity or product placed on the market requires a due-diligence statement (DDS) lodged in the EU Information System (TRACES) before customs clearance or first supply. The DDS contains a reference number, the operator's identity, the HS code and quantity, the country of production, geolocation data, and a statement of compliance signed by the operator.

Downstream traders receiving the goods reference the upstream DDS number, avoiding duplicate submissions along the chain but creating an unbroken paper trail from the plot to the shelf. Customs authorities check the DDS reference at the border. No DDS, no import.

• One DDS per batch or shipment, lodged before placing on the market
• Contains geolocation of all production plots for that batch
• Issued a unique reference number by the EU Information System
• Referenced (not re-created) by every downstream trader in the EU chain
• Retained for five years, available on request to competent authorities

Operator vs trader — who does what

EUDR distinguishes operators (the entity first placing the commodity or product on the EU market — importers, or EU producers) from traders (any downstream party in the EU chain). The duty split matters because the geolocation and risk-assessment work sits with the operator, while traders inherit a lighter documentation and reference-passing duty. Large traders, however, pick up the full operator duties.

• Operators (all sizes) — full due diligence, geolocation, risk assessment, mitigation, DDS submission
• Non-SME traders (large enterprises) — treated as operators, with the full three-step due-diligence duty on the goods they trade
• SME traders (small and medium enterprises) — reduced duty: collect and retain the DDS reference of upstream suppliers, cooperate with competent authorities
• Retailers — treated as traders under the size-based split above

How EUDR overlaps with DPP, CSDDD, EUTR and FLEGT

EUDR does not exist in isolation. It replaces the older EU Timber Regulation (EUTR, 995/2010) for wood — the timber-specific due-diligence regime — from 30 December 2025. It sits alongside the FLEGT VPA licensing scheme, which now offers a fast-track compliance route for licensed timber from partner countries. And it overlaps significantly with the Corporate Sustainability Due Diligence Directive (CSDDD), which requires broader human-rights and environmental due diligence across the value chain.

• EUTR (2010) — repealed and replaced by EUDR for wood from 30 December 2025
• FLEGT — licensed timber from VPA partner countries is presumed EUDR-compliant, easing the workload for wood from those jurisdictions
• CSDDD — broader value-chain due diligence including human rights; EUDR data supports but does not replace the CSDDD obligation
• DPP — the same commodity-level traceability data that satisfies EUDR feeds naturally into the substances-and-sourcing sections of an ESPR DPP

Penalties and enforcement

EUDR requires Member States to impose penalties that are 'effective, proportionate and dissuasive' — and, unusually, specifies minimum maximums directly in the regulation. This is one of the most sharply-teethed environmental regulations in the EU catalogue.

• Maximum fine of at least 4% of EU annual turnover for infringements
• Confiscation of the non-compliant goods
• Confiscation of revenues generated from the non-compliant transaction
• Temporary exclusion (up to twelve months) from public procurement and public funding
• Prohibition on the operator placing further covered goods on the market until compliance is demonstrated
• Public naming of the operator and the infringement

What to do now

The delay to 30 December 2025 (large operators) and 30 June 2026 (SMEs) bought time but did not remove the workload. The commodities are already in the ground, the plots are already the plots they are, and the data collection required to prove deforestation-free status is a multi-quarter project with every tier of your supply chain.

• Map your commodity footprint — every SKU, every input, every derivative — against the seven EUDR commodities
• Identify your operator vs trader position — for each commodity, are you the operator (first placer) or a trader (downstream)?
• Collect geolocation data from first-tier suppliers — polygon for plots >4 hectares, coordinate for smaller plots, with production period
• Assess country risk — flag high-risk jurisdictions in your sourcing map
• Pilot the DDS workflow — end-to-end from supplier data through to a TRACES submission, on a low-volume line, well before your compliance date
• Build the resolver into your DPP roadmap — the same data serves both regulations