EUDR 101: What You Need to Know About Europe's New Deforestation Law
Tomas Novotny
Sustainability Expert
21 Feb 2025
About 2 mins
What is EUDR?
The European Union Deforestation Regulation (EUDR) is a groundbreaking law aimed at curbing deforestation and promoting sustainable practices in global supply chains. It prohibits the import, sale, or export of certain commodities and their derivatives within the EU unless they are proven to be deforestation-free.
Key Commodities Affected
The EUDR applies to seven main commodities and their derived products:
1. Wood and timber products
2. Palm oil
3. Soy
4. Coffee
5. Cocoa
6. Rubber
7. Cattle (beef and leather)
Timeline for Implementation
Update: As of November 15, 2024, the EU has agreed to delay the implementation of EUDR by one year. The new compliance deadlines are:
– Large companies: December 30, 2025
– SMEs: June 30, 2026
The EUDR defines business sizes as follows:
- Large and medium-sized businesses: Companies that exceed two or more of these thresholds:
- More than 50 employees
- Over €10 million in turnover
- Over €5 million balance sheet
- Small and micro enterprises (SMEs): Companies that fall below at least two of the above thresholds
Core Requirements
- Deforestation-free: Products must not contribute to deforestation or forest degradation after December 31, 2020.
- Legal production: Commodities must be produced in accordance with the relevant laws of the country of origin.
- Due diligence statement: Companies must provide a statement indicating no more than negligible risk of non-compliance.
Due Diligence Obligations
Companies must:
- Collect detailed information on their supply chains
- Assess and mitigate risks of non-compliance
- Maintain documentation for at least five years
- Submit due diligence statements before placing products on the market
Implications for Businesses
- Enhanced supply chain transparency
- Potential need for new traceability systems
- Increased compliance costs
- Risk of penalties for non-compliance (up to 4% of EU turnover)
Looking Ahead
The EUDR represents a significant shift in global trade practices, aiming to reduce the EU’s impact on worldwide deforestation. As the implementation date approaches, businesses must start preparing now to ensure compliance and contribute to more sustainable, deforestation-free supply chains.
Contact our team to find out how Sedex can help you prepare your supply chain for EUDR compliance.
