EU Regulation on Deforestation-free Products (EUDR)
The Regulation on Deforestation-free Products (EUDR), Regulation (EU) 2023/1115, regulates trade in certain agricultural and timber products: Import, export and trade on the EU market are only permitted if products are demonstrably deforestation-free and legal. The EU aims to minimise the part played by European consumption in global deforestation by introducing binding corporate due diligence obligations. These obligations will affect the following raw materials: wood, cocoa, coffee, palm oil, rubber, beef and soya, as well as products made from them. Violations can result in heavy fines, product confiscation and exclusion from the market.
With the amending Regulation No. 2025/2650 of 23 December 2025, the start of application of the EUDR was postponed by 12 months. The EUDR will therefore apply to large companies from 30 December 2026 and to micro and small companies from 30 June 2027. The postponement of the start of application will give the affected economic operators, producers in third countries and the competent authorities of the EU Member States more time to prepare for the application of the EUDR.
The aforementioned amending regulation also introduced the following simplifications to the application of the EUDR:
- Simplifications for small primary producers from low-risk countries;
- Removal of the obligation to pass on reference numbers along the EU supply chain;
- Exclusion of books, newspapers and other printed matter from the scope of the EUDR.
In addition, a review clause obliges the European Commission to examine further potential relief by April 2026, report on this to the European Parliament and the Council of the EU and, if necessary, submit a corresponding legislative proposal.
Background and goals
The European Union is a significant factor in deforestation worldwide. The EU's considerable consumption of agricultural products such as soy and palm oil is a key factor in global deforestation. As one of the world's largest economies, the EU shares responsibility for this development.
The ecological urgency is clear: deforestation and forest degradation are exacerbating the crises of climate change and biodiversity loss. Land use change is the second largest cause of climate change, accounting for around 12 % of global emissions. The overarching aim of the regulation is to reduce global deforestation and forest degradation caused by the EU market, while reshaping supply chains to prevent products from areas deforested after 31 December 2020 from entering the EU. The goal is to reduce greenhouse gas emissions, combat the loss of biodiversity and promote sustainable supply chains.
The regulation requires companies to track their supply chains. The competent authority for implementation in Germany is the Federal Office for Agriculture and Food. The EUDR will replace the earlier EUTR (EU Regulation No. 995/2010, EU Timber Regulation). Special rules apply during a transitional period until 2028, for which the date of harvesting and placing on the market are decisive.
Actors & obligations
The Regulation (in its current version) distinguishes between different economic operators with different obligations. The responsibilities of companies vary depending on their role, size and position in the supply chain.
1. Operators
- Their core obligation: Before products are traded, operators must carry out comprehensive due diligence. This serves to prove that the products are deforestation-free and have been produced in accordance with the relevant legislation of the country of production.
- Implementation of due diligence: This includes a detailed analysis of the entire supply chain obtained by collecting and documenting relevant information, an assessment of potential risks (e.g. based on the risk level of the country of origin, which is assessed by the EU) and the implementation of risk mitigation measures in cases where the risk has been assessed as non-negligible. The result is documented in an electronic due diligence statement, which is submitted digitally to the EU information system prior to the relevant raw materials and products being imported, exported, or made available on the market.
- Trade requirement: Relevant products may only be placed on the market or exported if it can be proven that they are deforestation-free and legal and that the due diligence obligations have been fulfilled. Failure to comply will result in a trading prohibition.
- Further obligations: Operators must review their due diligence system annually and ensure that it is up to date. They must also store the data for five years. If new information about possible non-compliance emerges, they must adapt their due diligence system accordingly.
2. Traders
Traders are companies that resell EUDR-relevant products within the EU after they have already been placed on the market by operators.
Raw materials and products
The EU Deforestation Regulation applies to seven key raw materials and a large number of products made from them, which are defined in Annex I of the regulation via their customs tariff numbers (HS codes):
- Wood (e.g. furniture, paper, printed matter)
- Cocoa (e.g. chocolate, cocoa butter)
- Coffee
- Palm oil (e.g. glycerine, fatty alcohols)
- Rubber (e.g. tyres, seals)
- Beef (e.g. live cattle, leather)
- Soya (e.g. soya flour, soya oil)
EUDR trading conditions
The following basic conditions apply to the import of and trade in the products concerned: 1. The product must be deforestation-free, i.e. it must not originate from areas that were deforested after 31 December 2020. 2. Production must comply with the laws of the country of production, particularly with regard to land use, the environment and human rights. 3. An electronic due diligence statement is available in the EU information system.
Three-stage due diligence
Companies that import, export or make available products subject to EUDR on the EU market must establish a due diligence system, check it annually to ensure that it is up to date and store the documents for five years.
Due diligence includes the following steps:
- Collection of information, data and documentation necessary to fulfil the requirements set out in Article 9;
- Risk assessment measures in accordance with Article 10
- Risk mitigation measures in accordance with Article 11
If the company identifies no risk of deforestation or a negligible risk, it records the result in a due diligence statement and confirms it by submitting it to the EU information system.
Step 1: Collection of information (Article 9)
The aim of this first stage is to ensure complete transparency and traceability right back to the origin of the product. The core requirement is geolocalisation: Exact geographical coordinates with at least six decimal places must be given for each production plot. For plots larger than four hectares, the exact contours (polygon data) must be specified. Cattle are a special case where it is necessary to trace all farms involved in raising the animals. Other mandatory data includes the production period (for comparison with the cut-off date), a clear product description as well as quantity, supplier and customer data. All data collected must be kept for a period of five years.
Step 2: Risk assessment (Article 10)
The aim of the second stage is to assess whether the product fulfils the requirements of the Regulation. Risk factors that must be taken into account include the complexity of the supply chain and the risk that compliant and non-compliant goods may be mixed (e.g. when timber from legal and illegal sources is combined), the presence of forests and indigenous peoples in the area of origin, and reports from third parties ("substantiated concerns"). Country benchmarking is an indicator for assessing the risk of deforestation or forest degradation: The EU categorises countries into risk categories (low, normal, high). A simplified procedure applies for "low-risk" countries. Article 13 of the EUDR describes the simplified due diligence obligation: If the goods originate from a low-risk country and circumvention of the EUDR can be ruled out after assessing the complexity of the supply chain and the risk, no risk assessment (according to Article 10 of the EUDR) has to be carried out, and no risk mitigation measures have to be taken (see Article 11 of the EUDR).
Step 3: Risk mitigation (Article 11)
The third stage is triggered if a non-negligible risk was identified in stage two. The aim is to reduce the risk to a negligible level. Possible measures include requesting additional information or independent studies, carrying out independent audits on site and investing in and supporting suppliers, especially smallholders. As a last resort: If the risk cannot be reduced to a negligible risk, the product is strictly prohibited from being traded.
Sanctions
Violations of the EU deforestation regulation can result in severe penalties:
- Fines of up to four percent of the EU-wide annual turnover
- Confiscation of products and revenue
- Temporary exclusion from public tenders