10 Things You Should Know About the EU Deforestation Regulation (EUDR)

The European Union has introduced a new regulation aimed at tackling deforestation and forest degradation across the globe: the EU Deforestation Regulation (EUDR).

The EUDR will require businesses trading in specific commodities to ensure their products are deforestation-free. This regulation is set to dramatically impact how companies source, produce, and sell goods in the European Union. Here are the 10 key things you need to know to prepare your business for the upcoming changes.

1. Wide Range of Commodities Are Covered

The EUDR affects seven major commodities known to contribute to deforestation, including:

• Cattle

• Cocoa

• Coffee

• Palm Oil

• Rubber

• Soya

• Wood

Not only do these core commodities fall under the regulation, but many of their derivative products do as well, such as beef, leather, chocolate, palm oil-based goods, rubber tires, soy-based animal feed, and books made from wood products like paper. Understanding whether your products fall under the EUDR’s scope is the first critical step.

2. EUDR Non-Compliance

From December 30, 2024 (or June 30, 2025 for micro or small businesses), it will be prohibited to place relevant products on the EU market or export them from the EU unless they meet the following criteria:

• They are deforestation-free.

• They are produced in accordance with the relevant legislation of the country of production.

• They are covered by a due diligence statement, indicating no more than a negligible risk of non-compliance.

3. Compliance Deadline is December 30, 2024

From December 30, 2024, companies must comply with the EUDR to continue placing relevant products on the EU market or exporting them from the EU. For micro and small enterprises, this deadline is extended to June 30, 2025. Preparing for this now is critical, as products entering the EU market after these dates will need a due diligence statement proving they meet EUDR standards.

4. “Deforestation-Free” Is the Key Standard

To comply, commodities must be proven “deforestation-free.” This means the land used to grow or produce the commodity must not have been deforested after December 31, 2020. This applies whether deforestation is legal or illegal in the country of origin. For wood products, this also means they cannot contribute to forest degradation, which includes converting primary forests into plantations or other wooded lands.

5. Local Social and Environmental Laws Apply

In addition to meeting deforestation-free standards, the production process must comply with the relevant environmental and social laws in the country of origin. This includes respecting:

• Land use rights

• Environmental protections

• Human rights (such as the rights of indigenous peoples)

• Labor laws

• The principle of Free, Prior, and Informed Consent (FPIC)

Non-compliance with these local laws can result in penalties similar to those for breaching deforestation standards.

6. Due Diligence Obligations Are Central

The EUDR places the responsibility for compliance squarely on the companies placing goods on the EU market. These businesses must conduct comprehensive due diligence to prove their products meet EUDR standards. Due diligence includes:

• Collecting information on the product’s production and supply chain.

• Conducting a risk assessment to determine if there’s a risk of non-compliance.

• Implementing risk mitigation measures, such as third-party audits, additional documentation, or capacity-building with suppliers.

This process culminates in a due diligence statement that companies must upload to a centralized EU system.

7. Products Must Be Risk Assessed Based on Country of Origin

The European Commission will classify countries into high-risk, standard-risk, and low-risk categories based on their deforestation practices. Depending on the country of origin’s risk level, businesses may need to implement more rigorous due diligence practices to assess and mitigate the risk of non-compliance.

For high-risk countries, more extensive documentation, audits, and independent assessments may be required to prove that the products are deforestation-free.

8. National Authorities Will Conduct Regular Checks

The EUDR will be enforced by national authorities in EU member states. These authorities will conduct regular inspections, often unannounced, to ensure companies comply with the regulation. They will have the power to:

• Impose corrective actions, such as banning non-compliant products.

• Impose fines and sanctions for repeated breaches.

• Confiscate goods and revenues gained from non-compliant products.

If national authorities find that a product poses a non-negligible risk of non-compliance, they can prevent it from entering the market until the issue is resolved.

9. Penalties for Non-Compliance Can Be Severe

Penalties for non-compliance with the EUDR can include:

• Fines up to 4% of the company’s EU turnover for the previous financial year.

• Confiscation of products or revenues gained from non-compliant products.

• Temporary bans on participating in public procurement contracts or accessing public funding.

• In serious cases, companies can be banned from the EU market for repeated violations.

These penalties are designed to ensure that non-compliance is costly and that businesses take the regulation seriously.

10. Private Parties Can Submit Complaints

In addition to government enforcement, the EUDR empowers private parties—including NGOs, consumers, and competitors—to submit complaints if they believe a company is not complying with the regulation. These complaints must be substantiated, and national authorities are required to investigate them. Private parties also have the right to pursue administrative or judicial action if authorities fail to take appropriate action.

This increases the level of scrutiny on businesses and further encourages compliance, as anyone can potentially bring issues of non-compliance to light.