EUDR Regulation. A revolution in responsible supply chain

To whom does the EUDR Regulation apply?

EUDR regulation apply to entities (operators) introducing certain goods to or exporting from the European Union market, such as:

• wood,
• rubber,
• coffee,
• cocoa,
• palm oil,
• soy,
• cattle.

In addition to the above-mentioned goods, there are also derived products listed in Annex I to the Regulation. The Regulation also applies to traders in the supply chain who make these goods and products available on the EU market.

It is worth noting that the Regulation provides for some simplifications for micro, small and medium-sized enterprises (SMEs) in order to minimize administrative burdens. Nevertheless, as a rule, most companies operating in the supply chains of the listed goods will be subject to the new Regulations.

When will the new regulations come into force?

The dates of entry into force of the EUDR (EU Deforestation Regulation) vary and depend on the size of the company:

• large and medium-sized enterprises: 30 December 2025
• other companies (including SMEs): 30 June 2026 (except for timber products covered by previous regulations, for which the deadline is 30 December 2025).

For the purposes of applicable regulations, including the EUDR, a large enterprise is an entity that:

• employs at least 250 employees, and
• meets one of the following financial criteria:
  • annual turnover exceeds EUR 50 million,
  • the total annual balance sheet (total assets) amounts to over EUR 43 million.

It is worth starting preparations now to avoid problems with adapting to the new requirements in the designated time. Check how we can help

What new obligations does EUDR impose on companies?

The main pillar of the EUDR is the Due Diligence system that companies must implement. It includes three key elements:

• Information collection: companies will collect detailed data on the origin of goods and products, including the country of origin of the raw material, the geographical coordinates of the production area and documents confirming the legality and sustainability of the acquisition.
• Risk analysis: Companies will be required to assess the risk of whether a raw material has contributed to deforestation or forest degradation. This analysis must be documented and based on objective criteria.
• Risk mitigation measures: If elevated risks are identified, companies will implement appropriate mitigation measures, such as audits, certifications or discontinuation of risky suppliers.

Other obligations on companies, such as:

• Record-keeping obligation: all records relating to the due diligence system are to be kept for at least five years and made available to regulatory authorities upon request.
• Cooperation with state authorities: companies must provide supervisory authorities with access to documentation and production plants and cooperate in inspections.
• Registration in the EUDR Information System: companies will be required to register and submit electronic due diligence declarations via a dedicated online platform.

How to prepare for EUDR?

The process of complying with EUDR requirements requires companies to undertake a number of actions, including:

• Understanding the regulations: it is crucial to carefully read the Regulation (EU) 2023/1115 and any related implementing acts and European Commission guidance.
• Supply chain mapping: businesses must identify all suppliers and analyse the origin of the goods and regulated products they use.
• Implement a due diligence system: internal procedures for information collection, risk analysis and risk mitigation should be developed and implemented throughout the supply chain.
• Employee training: employees responsible for purchasing, logistics and compliance should be trained on new requirements and procedures.
• Cooperation with suppliers: it is necessary to establish a dialogue with suppliers to obtain the necessary information and ensure compliance with the EUDR throughout the supply chain.
• Leverage existing standards and certifications: standards such as ISO 38200, PEFC CoC and FSC CoC can help demonstrate the legality and sustainability of wood raw materials.
• Registration in the EUDR Information System: companies should register in the system as soon as possible and familiarise themselves with the training materials available.

The European Commission is also providing simplifications to make it easier for companies to implement the EUDR. These include the possibility to reuse due diligence declarations in certain cases, submitting a single declaration per year for recurring supplies, and simplifications for large companies at lower levels of the market.

Sanctions for violating the Regulation – what are they?

Member States are required to lay down effective, proportionate and dissuasive sanctions for infringements of the EUDR. These may include financial penalties (up to 4% of annual turnover generated by an entity throughout the EU in the financial year preceding the decision to impose a fine), confiscation of illegal products, a ban on placing them on the market, or even temporary exclusion from public procurement procedures (12 months). Information about infringements will also be published by the European Commission.

EUDR – how can we help?

The EUDR regulation is a breakthrough in the EU’s approach to combating global deforestation. However, for companies, it means a thorough analysis of their supply chains, implementation of due diligence systems and close cooperation with suppliers.

While implementing the new rules may pose challenges, it is also a key step towards more sustainable and responsible trade, benefiting both the environment and businesses that build their reputations on transparency and ethical conduct.

Do not delay - the time to prepare for EUDR is now. Check out our ESG sustainability services