What is EUDR (EU Deforestation Regulation)?

What is the EUDR?

The EU Deforestation Regulation (EUDR), formally Regulation (EU) 2023/1115, is a binding European Union law requiring companies that place certain commodities on the EU market — or export them from it — to demonstrate through due diligence that those products are deforestation-free and legally produced. It replaces the weaker EU Timber Regulation and represents the most ambitious deforestation-related trade regulation enacted by any major economy.

Why It Matters

The EU is the world's second-largest importer of tropical deforestation embedded in traded commodities, behind China. Between 1990 and 2020, global consumption patterns drove the loss of approximately 420 million hectares of forest. The EUDR directly targets this demand-side driver by conditioning market access on verified deforestation-free production.

The regulation's market power is substantial. The EU's single market of 450 million consumers and $16 trillion GDP creates a compliance imperative for any company with European trade exposure. Major commodity traders, consumer goods companies, and retailers must overhaul sourcing practices or face exclusion from one of the world's most lucrative markets.

Enforcement provisions are serious. Non-compliant operators face fines of up to 4% of annual EU-wide turnover — a penalty structure modeled on GDPR. Competent authorities in each member state will conduct checks on a risk-proportionate basis, with higher scrutiny applied to commodities originating from high-risk countries. The regulation also empowers customs authorities to detain non-compliant shipments at EU borders.

The EUDR's influence extends well beyond Europe. Producing countries are adapting national legislation and monitoring systems to maintain EU market access. Financial institutions are incorporating EUDR compliance into lending criteria. And other jurisdictions — the UK, Australia, Japan — are watching the EUDR's implementation as a template for their own measures. The regulation is reshaping global commodity governance.

How It Works / Key Components

The EUDR applies to seven commodity categories: cattle, cocoa, coffee, oil palm, rubber, soya, and wood, along with a wide range of derived products including leather, chocolate, printed paper, glycerol, and charcoal. Operators must submit due diligence statements before placing products on the EU market, confirming three criteria: the product is deforestation-free (no forest loss after December 31, 2020), the product complies with the laws of the country of production, and the operator has conducted adequate due diligence.

Due diligence involves three steps. First, information collection — operators must obtain geolocation coordinates of all plots of land where relevant commodities were produced. For cattle, this includes all establishments where animals were kept. Second, risk assessment — operators must evaluate whether the information collected reveals any risk of non-compliance. Third, risk mitigation — where risk is identified, operators must take adequate measures to reduce it to a negligible level before placing the product on the market.

The regulation uses a country benchmarking system to calibrate enforcement intensity. The European Commission classifies producing countries as low, standard, or high risk based on deforestation rates, governance quality, and other criteria. Products from low-risk countries undergo simplified due diligence, while high-risk origins face enhanced scrutiny and higher inspection rates.

Large operators faced the original compliance deadline of December 30, 2024, subsequently postponed to December 30, 2025. Small and medium enterprises receive an additional six months. The Commission is developing an information system to facilitate due diligence statement submission and cross-border data sharing. Implementation remains a moving target, with ongoing technical guidance and FAQ publications clarifying scope and procedure.

Council Fire's Approach

Council Fire supports organizations navigating EUDR compliance through supply chain mapping, risk assessment methodology development, and due diligence system design. We bring particular depth in tropical commodity landscapes and producer-country engagement, helping clients build compliance architectures that satisfy regulatory requirements while preserving commercial relationships and supporting smallholder inclusion.

Frequently Asked Questions

When does the EUDR take effect?

The regulation entered into force on June 29, 2023. The compliance deadline for large operators is December 30, 2025, following a one-year postponement from the original December 2024 date. SMEs have until June 30, 2026. Products placed on the market before the compliance date are not subject to the regulation.

Does the EUDR apply to products already in the supply chain?

The regulation applies to products placed on the EU market or exported from it after the compliance date. Existing inventory already on EU shelves or in warehouses before that date is not retroactively covered. However, any new placement — including restocking from the same supply chain — must comply.

How does EUDR affect smallholder producers?

Smallholders face significant compliance burdens, particularly around geolocation data collection and documentation. The regulation includes provisions encouraging landscape and jurisdictional approaches to reduce the cost burden on small producers. In practice, the impact depends heavily on how EU operators structure their supply chains — those that invest in producer support and inclusive traceability systems will maintain access to smallholder supply, while those that simply de-risk by sourcing only from large plantations risk undermining livelihoods without reducing deforestation.