Ensuring deforestation-free supply chains: The new EU regulation

The requirements of the EUDR will come into force in the next few months. Companies must be prepared for the multitude of obligations.

On 29 June 2023, the EU Regulation 2023/1115 on deforestation-free supply chains (“EUDR“) came into force. Unlike national supply chain laws and their European counterparts, the EUDR was negotiated and enacted without any fanfare. Nevertheless, its impact on various industries will be significant. The EUDR introduces a new framework that imposes extensive obligations on market participants and distributors. They must ensure that products derived from certain raw materials (i.e. relevant products) are produced without deforestation and in accordance with the national regulations of the country of production.

The EUDR will be applicable to large and medium-sized companies from 30 December 2024 onwards and to small enterprises from 30 June 2025. Since the EUDR is not a directive but a regulation, it will be directly applicable in all EU member states without the need for separate transposition measures. The regulation focuses on seven key raw materials: cattle, cocoa, coffee, oil palm, rubber, soya, and wood. Companies must compare their products with those listed in Annex I of the EUDR to determine whether they fall within the scope of the EUDR and ensure compliance with it by collecting the necessary data, conducting risk assessments, and implementing risk mitigation measures.

To comply with the EUDR, companies are obliged to collect information, assess risks and, if necessary, take measures to minimise these risks. This includes ensuring that the relevant products are free from deforestation, have been produced in accordance with the laws of the country of production and are accompanied by a due diligence declaration. Non-compliance can result in significant penalties, including fines, confiscation of products and reputational damage. Companies should therefore immediately check which of their products are affected, be clear about their role under the EUDR and ensure that they can fulfil their due diligence obligations. We are happy to support you in the effective implementation of the EUDR.