This article was originally posted on 5th November 2024 and updated 23rd October 2025 to incorporate European Commission updates following a simplification of EUDR reporting requirements.
This proposed amendment means that medium and large businesses don’t have as much time as anticipated when the EU announced a delay to December 2026. The December 2025 deadline still applies, with a 6 month grace period for enforcement.
Deforestation is one of the greatest threats to humanity’s ability to operate within planetary boundaries, with the net loss in forests globally between 2010 and 2020 being 4.7 million hectares per year.
It’s welcome news therefore that the European Union has introduced legislation to curb deforestation in the supply chains of products supplied into the bloc. The Regulation on Deforestation-Free Products (EUDR) is part of the EU’s biodiversity strategy for 2030, the EU’s new EU forest strategy for 2030 and the European Green Deal and became law in April 2023.
But, of course, new rules sometimes mean increased pressure on businesses and this guide summarises the key things to watch out for if you are buying or selling affected products within the EU.
The EUDR’s impact assessment estimates that, without this intervention, the EU’s consumption and production of the six commodities alone could cause almost 250,000 hectares of deforestation annually by 2030.
The Regulation, which will have a considerable impact all the way through a product’s supply chain and requires effective due diligence to verify the origin of raw materials, with the onus falling on the businesses trading the products.
The overarching implication is that businesses need to first collect information, then carry out a risk assessment followed by risk mitigation.
What products are covered by the EUDR?
The Regulation applies to the following commodities and some derived products:
- Soy, beef, palm oil, wood, cocoa, coffee, and rubber.
- Derived Products: Check Annex I of the Regulation for a full list (customs codes are provided). Examples include leather goods, furniture, and chocolate.
Key EUDR compliance dates:
Compliance becomes mandatory on:
- For medium and large companies (update 21 Oct 2025): the original Dec 2024 date was delayed by the European Commission by 12 months to 25 December 2025 but is now proposed to have an additional grace period for checks and enforcement until June 2026)
- For small and micro-sized companies (update 21 Oct 2025): originally 30 June 2025, now proposed to delay to 30th December 2026
Whether your own company will be classified as a “micro or small”, “medium-sized” or “large” company depends on the thresholds defined in the Accounting Directive (Directive 2013/34/EU). A “medium-sized enterprise” is a company that exceeds at least two of the following three size criteria on the balance sheet date:
- Balance sheet total greater than 5,000,000 Euros
- Net sales above 10,000,000 Euros
- Average number of employees above 50
Who is affected by the EUDR?
The Regulation applies to businesses that sell relevant products in the EU market or export them from the EU. This includes:
- Operators: Those who directly import or produce relevant products listed (see below for details on determining if your products are covered).
- Traders: Those who buy and sell products already on the EU market.
- Large retailers: Businesses that sell large quantities of relevant products.
How can my business comply with the EUDR?
First up, Due Diligence:
Businesses first placing items on the EU market must gather information about their supply chains to verify that products are deforestation-free and legally produced. This includes:
- Deforestation-Free: Products must not be linked to deforestation after December 31, 2020.
- Legality: Products must comply with relevant legislation in the country of production.
Risk Assessment: Businesses must assess the risk of deforestation in their supply chains, focusing on high-risk countries.
Documentation: They also need to maintain records to demonstrate due diligence efforts (e.g. supplier information, geolocation data).
Due Diligence Statement: Operators must submit a statement confirming their due diligence efforts.
There will be a list of high risk countries set out that should help businesses to assess risk, though has not yet been published.
Update 21st October 2025: the European Commission has now proposed the following businesses will only have to meet simplified reporting requirements as follows:
- Micro and small operators from low risk countries: will only be required to report the quantity of relevant products, and location of production. They will still have to ensure products have no or negligible deforestation risk.
- Downstream operators and traders: will no longer be required to report information beyond keeping a record of due diligence from suppliers and registering on the EU reporting system. Downstream operators and traders will still assume responsibility for compliance of all products they place on the market.
What are the penalties for not complying with the EUDR?
In short…wide-ranging and both financial and operational. Penalties for non-compliance include:
- financial penalties of up to 4% of a company’s EU turnover
- confiscation of product
- exclusion from public procurement processes
- bans on importing/exporting non-compliance product
And, of course, reputational risk as enforcement agencies are likely to be looking for early and high profile ‘scalps’.
How to get started with EUDR compliance:
- Check Annex I of the Regulation to determine if your products are listed or contain derived products from the list;
- Decide whether you are an Operator, Trader or Exporter to identify your role in the supply chain;
- Map your supply chain to identify suppliers and the origin of materials;
- Conduct a risk assessment to evaluate deforestation risks in your supply chain;
- Gather documentation: collect supporting documents for due diligence;
- Identify gaps: determine what information is missing to demonstrate compliance.
If you’d like to discuss your company’s exposure and response to EUDR, book a no-obligation callback here.
Additional Resources
- Proposed amendment 21st October 2025: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_2464
- EU Regulation Text: https://eur-lex.europa.eu/EN/legal-content/summary/fighting-deforestation-and-forest-degradation.html
- EU Green Business Website with Frequently asked questions: https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en
This is a general guide, and specific requirements might vary depending on your business size and role in the supply chain. Consider seeking specific advice for a more comprehensive understanding of your obligations.
