The European Union's Deforestation Regulation (EUDR)

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Achieving EUDR Compliance in 6 Steps

What is the EUDR?

The European Union’s Deforestation Regulation (EUDR) is a groundbreaking initiative designed to combat deforestation associated with the consumption of certain products within the EU market. Adopted to address global environmental challenges, the EUDR requires companies to adhere to stringent regulations to ensure their products are free from deforestation. This regulation replaces and expands upon the European Timber Regulation, extending its scope beyond legality to cover sustainability aspects.

What Information Do Organisations Need to Provide?

Organisations engaging in the EU market must undergo detailed due diligence and verification processes to demonstrate the deforestation-free status of their products. This involves providing comprehensive information on the traceability of products and ensuring compliance with relevant legislation in the country of origin. The due diligence process aims to enhance transparency and traceability in the production and marketing of products associated with deforestation.

What Changes Are Coming?

While the law was initially slated to be enforced starting December 30, 2024, pending the approval from the EU Parliament, the law will likely come into force December 30, 2025 for large operators and traders. Micro and small enterprises will be subject to the law June 30, 2026. While there may be significant shifts in timelines, the core text itself and responsibilities stipulated in the law remain largely unchanged.  This includes exercising diligence in supply chain management, scrutinising sourcing practices, and ensuring products meet the sustainability criteria set by the regulation. The EUDR marks a shift from focusing solely on the legality of products to embracing a broader sustainability perspective, covering key commodities such as beef, cocoa, coffee, palm oil, soybeans, rubber, wood, and their derivatives.

To further assist companies in preparing for the law, the EU Commission published an accompanying guidance document  and updated FAQ to clarify common questions and facilitate compliance.

Who and What is Affected?

The EUDR applies to any organisation trading products associated with deforestation within the EU, whether as an operator putting the product on the market for the first time or as a trader distributing the product. The regulation casts a wide net, affecting various industries, including clothing brands, coffee roasters, and others sourcing cellulosic fibres or dealing with commodities linked to deforestation. Companies need to be aware of the potential penalties, including fines of up to 4% of annual turnover, for non-compliance.

What Happens Next?

Given that the twelve-month delay is still contingent on approval from the EU Parliament, Anthesis encourages companies to continue working towards compliance. Effective implementation involves establishing a supply chain monitoring system, improving transparency, and ensuring traceability to identify and address unsustainable business practices. Certifying organisations like the Forest Stewardship Council can assist companies in meeting the legislation’s requirements.

Additional updates that may help companies in their transition pertain to the country benchmarking that will dictate the extent of due diligence required and the Information System that will house due diligence statements. The EU Commission is still developing the country benchmarks but has indicated that most countries will be classified as “low risk”.  Products originating from low-risk origins require “simplified due diligence” wherein geolocation coordinates must be included within the due diligence statement, but a full risk assessment (to assess and mitigate risks) is not required unless there is a potential deforestation or legal compliance risk identified.

Additionally, the EU Commission announced that the Information System where due diligence statements will be submitted will be operational and accepting registrations in November 2024. Companies are encouraged to take advantage of upcoming training sessions and are welcome to register with the system and begin submitting due diligence statements.

Our Solutions

At Anthesis, our Forest Positive team is ready to support companies in navigating the complexities of the EUDR. We offer a range of services, including benchmarking, target setting, policy development, supplier engagement, monitoring, verification, and communication. As a recognised Delivery Partner by the Accountability Framework initiative, we utilise international norms and good practices to help companies assess, prioritise, and address deforestation-related risks in their supply chains.

Frequently Asked Questions

The EUDR aims to minimise the EU’s contribution to global deforestation and forest degradation, reduce greenhouse gas emissions, and combat global biodiversity loss by ensuring that products associated with deforestation are not marketed in the EU unless they comply with sustainability criteria.

Companies will have 18 months from the official entry into force of the regulation to adapt to the new rules. SMEs are granted a longer adaptation period.

Non-compliance may result in fines of up to 4% of annual turnover for companies allowing deforestation-linked commodities to enter the EU.

Anthesis offers a range of services, including benchmarking, target setting, policy development, supplier engagement, monitoring, verification, and communication, to help companies create deforestation- and conversion-free supply chains.

The Accountability Framework serves as a guide for achieving ethical supply chains in agriculture and forestry. Anthesis, recognised as a Delivery Partner, utilises the framework’s core principles to support companies in addressing deforestation-related risks.

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