What is EUDR?

Background and Purpose

The EU Deforestation Regulation (EUDR), adopted in June 2023, aims to combat global deforestation and forest degradation driven by the EU's consumption of certain commodities and products. It is a cornerstone in the EU’s strategy to address climate change, biodiversity loss, and human rights abuses, aligning with its commitments under the European Green Deal and the Paris Agreement.

The regulation mandates that companies ensure specific commodities and products placed on or exported from the EU market are "deforestation-free" and produced in accordance with the laws of the country of origin. This applies to agricultural products, their derivatives, and goods linked to deforestation risks, creating a more transparent and sustainable global supply chain.

Where it Applies

The regulation applies to commodities and their derivatives identified as high-risk for deforestation. These include:

• Agricultural Commodities: Soy, palm oil, coffee, cocoa, cattle (meat), and timber.

• Derived Products: Goods such as leather, chocolate, rubber, and furniture.

• Scope: 

  • Applies to both EU-based companies and non-EU companies exporting to the EU.

  • Targets companies of all sizes but introduces simplified requirements for SMEs.

Geographically, the EUDR applies to all products originating from or connected to deforestation, whether legal or illegal in the country of origin.

Timeline

The timeline anticipates that starting in December 2025, fines of up to 4% of a company’s annual revenue will be imposed for non-compliance.