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EUDR Legislation: Combating Deforestation

On 16 May 2023, the European Union adopted a new law to combat deforestation: Regulation (EU) 2023/1115, known as the European Union Deforestation-free Regulation (EUDR). This law ensures that products do not contribute to deforestation or forest degradation. This applies to products placed on the European market as well as those exported from it. The law is part of the European Green Deal and replaces the EUTR rules, which were only applicable to timber products.

Transitional Period

The regulation has been in force since 29 June 2023. Initially, it was to be implemented by December 2024 for operators and traders. However, after a postponement, they now have until 30 December 2025 to comply with the new rules. Micro or small enterprises that existed before 31 December 2020 only need to comply with the EUDR from 30 June 2026. This postponement does not apply to micro or small enterprises already trading in timber. For the definition of micro, small, and medium-sized enterprises, see Article 3 of EU Directive 2013/34.

The EUDR covers the following commodities: soya, cattle, palm oil, timber, cocoa, rubber, and coffee. Derived products from these commodities also fall under the regulation, including chocolate, rubber, furniture, and leather. Businesses can determine whether their product must comply with the requirements by referring to the relevant customs codes. The list of products, including customs codes, can be found in the annex to Regulation 2023/1115. The codes are also available via the official customs channels: Dutch Customs/Tax Authority and Belgian Customs/Federal Public Service Finance.

Requirements

The EUDR requires companies that first place the relevant products on the European market, or wish to export outside the EU, to act with due diligence so that the risk of deforestation from these products is negligible. This means they must operate a so-called Due Diligence System (DDS). Through the prescribed steps in this DDS, it must be demonstrated that the risk is negligible, and a due diligence statement must be submitted via an online government system.

From spring 2025, the EUDR Information System (the online platform for the due diligence statement) will be operational, including registration and training opportunities for users.

Market participants are required to:

  • Have procedures and measures in place to ensure that the products they place on the market or export comply with the due diligence system requirements. This means: they are deforestation-free; they are produced in accordance with the relevant legislation of the country of production, and they are accompanied by a due diligence statement.

  • Appoint a compliance officer at management level (not SMEs).

  • Evaluate and, if necessary, update the due diligence system at least once a year. (Keep records of changes for up to five years.) For this, an independent auditor must be selected to verify the strategies, controls, and procedures used to manage the risks.

  • Publish an annual report on their due diligence system for as wide an audience as possible, including publication online. (Not SMEs.)

  • The European Commission requires member state authorities to carry out checks on market participants and impose sanctions if necessary.

Phase 1: Information

Detailed information must be collected to demonstrate that the products comply with the EUDR:

  • Description, including trade and scientific name, raw materials contained or used in manufacturing;

  • Quantity, expressed in kilograms net mass and, where applicable, as specified in Annex I to Regulation (EEC) No 2658/87;

  • The country (and region) of production;

  • The geolocation of all production plots of raw materials or manufacturing, including production date or period;

  • Name, postal address, and email address of the companies, market participants, or traders who supplied or received the relevant products;

  • Adequate and verifiable information showing that the relevant products/commodities are deforestation-free and produced in accordance with the legislation of the country of production and with the right to use the area for their production.

Phase 2: Risk Analysis

A risk assessment must be carried out for each product to map the possible risk of non-compliance with the EUDR. All information must be included in a risk assessment to analyse and assess the supply chain. This assessment includes, among other things:

  • The risk classification of the country of production,

  • The presence of forests,

  • The presence of indigenous peoples,

  • The degree of deforestation or forest degradation,

  • National issues such as corruption, fraud, human rights violations, the complexity of the supply chain, and the compliance history of suppliers.

This risk analysis must be repeated at least once a year.

Phase 3: Risk Mitigation Measures

Identified risks must be reduced by conducting independent investigations/audits, collecting additional documentation, or collaborating with suppliers. If it appears that the risk is not negligible, measures must be taken to reduce the risk to zero or a negligible level. This may include:

  • Requiring additional information, data, or documentation;

  • Conducting independent investigations or audits;

  • Taking other measures relating to the information requirements of phase 1.

Procedures and measures to mitigate risks must be reviewed at least once a year.

Final Phase: Due Diligence Statement

If the risk is found to be negligible, a due diligence statement must be submitted in a government online system. This online system is expected by December 2025.

All businesses placing products for the first time on the internal market of the European Union (EEA) are required to carry out the steps above.

Exception: Simplified Due Diligence Procedure

If, in phase 1, the entrepreneur has established with certainty that all raw materials and products are produced in low-risk countries, phases 2 and 3 may be skipped, and the due diligence statement can be submitted directly. Authorities must only be provided with information on request to demonstrate that the risk is negligible.