Unpacking the European Union Deforestation Regulation

The European Union Deforestation Regulation (EUDR) prohibits the placement or export of specific commodities—coffee, cocoa, rubber, cattle, palm oil, wood, and soy—from the EU market unless they are deforestation-free, legally produced, and covered by a due diligence statement. The regulation applies to deforestation occurring after December 31, 2020. While large companies must comply by December 30, 2025, micro and small enterprises have until June 30, 2026. SMEs benefit from specific exemptions, such as not needing to submit due diligence statements for products already covered by one and being exempt from annual public reporting. However, they remain vulnerable to indirect supply chain risks and financial repercussions if their partners fail to comply. The EU is implementing a country risk benchmarking system by June 30, 2025, to categorize countries as low, standard, or high risk. Voluntary Sustainability Standards (VSSs) are recognized as supporting tools for risk assessment and traceability, though they do not exempt operators from their legal due diligence obligations. Non-compliance can lead to fines of at least 4% of a company's EU turnover, product confiscation, and trading bans.

• The EUDR applies to seven specific commodities and their derivatives: coffee, cocoa, rubber, cattle, palm oil, wood, and soy. For these products to be placed on or exported from the EU market, they must be deforestation-free (relative to a cutoff date of December 31, 2020), produced according to the laws of the country of origin, and supported by a due diligence statement.
• Compliance deadlines differ by company size: large and medium-sized companies must comply by December 30, 2025, while micro and small enterprises have until June 30, 2026.
• SMEs are granted several regulatory exemptions, including a deferred entry date, an exemption from publishing annual reports on their due diligence systems, and the ability to avoid submitting due diligence statements for products that already possess one.
• The EU is developing a country risk benchmarking system, expected to be operational by June 30, 2025, which will classify countries as low, standard, or high risk. Operators dealing exclusively with low-risk countries will face reduced requirements for risk assessments and mitigation.
• Traceability requirements include precise geolocation data (latitude and longitude to six decimal places). For plots larger than 4 hectares (excluding cattle), polygons must be used to outline the perimeter. Cattle production requires geolocation for all establishments where animals were raised.
• Voluntary Sustainability Standards (VSSs) can support EUDR compliance by providing tools for risk assessment, monitoring, and traceability, but they do not replace the legal obligation for due diligence.
• Enforcement involves regular checks by EU member state authorities, with higher scrutiny for high-risk products. Penalties for non-compliance include product confiscation, temporary trading bans, and fines that must reach at least 4% of the company's previous year's EU turnover.

APA

Sarmiento, F. (2025). Unpacking the European Union Deforestation Regulation. International Institute for Sustainable Development. https://www.iisd.org/system/files/2025-04/unpacking-european-union-deforestation-regulation.pdf

Chicago

Sarmiento, Florencia. Unpacking the European Union Deforestation Regulation. International Institute for Sustainable Development, 2025. https://www.iisd.org/system/files/2025-04/unpacking-european-union-deforestation-regulation.pdf.

Wikipedia

{{cite report |last1=Sarmiento |first1=Florencia |title=Unpacking the European Union Deforestation Regulation |publisher=International Institute for Sustainable Development |date=April 2025 |url=https://www.iisd.org/system/files/2025-04/unpacking-european-union-deforestation-regulation.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sarmiento2025unpacking, author = {Sarmiento, Florencia}, title = {{Unpacking the European Union Deforestation Regulation}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = apr, url = {https://www.iisd.org/system/files/2025-04/unpacking-european-union-deforestation-regulation.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }