What is the EU Deforestation Regulation (EUDR)?
The EUDR regulates the import, export, and placement on the EU market of seven commodities closely associated with deforestation—wood, cattle, soy, coffee, cocoa, palm oil, and rubber. Companies that produce, sell, or trade these commodities or their derived products in the EU, or move them across EU borders, must prove they are not linked to deforestation. Otherwise, they cannot sell their product in the EU or face penalties for non-compliance.
How to demonstrate no link to deforestation?
Do your due diligence:
Due diligence as part of EUDR compliance involves 3 steps:
Information collection: gather the information about your product and its suppliers, including precise geolocation data.
Risk assessment: Using the collected information, do a risk assessment to evaluate the risk of deforestation.
Risk mitigation: If risks are detected, take corrective measures to ensure “no deforestation” or reduce the risk to a negligible level.
However, companies sourcing from countries classified as low-risk benefit from simplified due diligence, which focuses mainly on information collection and does not require risk assessment or mitigation.
Prove legally
Verify that the commodities were produced in compliance with all applicable local laws. This verification must be done as part of the due diligence process.
Submit a Due Diligence Statement (DDS):
A Due Diligence Statement (DDS) is a formal document required under EUDR that companies must submit to prove that the products they are placing on or exporting from the EU market comply with the regulation's requirements.
File the DDS through the EU Information System TRACES.
Where to start?
Step 1: Identify if your products are subjected to EUDR
Check Annex 1 of EUDR to see a list of products covered under EUDR.
The products are listed using Harmonised System (HS) codes used to classify traded goods.
If your product is listed in the Annex, you will have to meet EUDR obligations.
Expert’s notes
Q: If I don’t see my product listed in Annex 1, am I free from EUDR obligations?
A: Not necessarily. If your product’s HS code isn’t in Annex 1, don’t assume it’s outside the EUDR—especially if it falls within the relevant seven commodities.
Annex 1 can include entire product categories or chapters. For example, pulp and paper from Chapters 47 and 48 of the Combined Nomenclature are listed in Annex 1. This means all products in these chapters are subject to EUDR, even if they aren’t listed individually. For instance, HS code 4819 (cartons, boxes, bags, and other paper packaging) isn’t explicitly listed in Annex 1, but products under this code are still covered under EUDR.
Not sure if the EUDR applies to your product?
Step 2: Determine the following
Am I an operator or a trader under the EUDR framework?
Am I an SME or a large enterprise under the EUDR framework?
Do I source from low, risk, standard risk or high risk countries?
Your EUDR obligations will depend on the answers to these questions. Operators usually carry most of the compliance burden, as they are the first entity to place relevant products on the EU market, while traders can often rely on the information and due diligence performed by upstream suppliers. SMEs are often—but not always—subject to less stringent due diligence requirements. Similarly, companies sourcing from low-risk countries benefit from simplified due diligence.
Step 3: Check your EUDR obligations
After completing Step 2, the next step is to identify which EUDR obligations apply to your company. These typically include:
Information Collection
This may range from collecting basic supplier details (name, email, address) to more complex data such as geolocation coordinates of production plots and documentation proving compliance with deforestation-free and legality requirements.
Risk assessment & mitigation
If you source from standard- or high-risk countries, you are required to conduct a risk assessment to determine whether your products may originate from deforested land.
The EUDR outlines several criteria for this process, including:
Prevalence of deforestation in the country of production
Complexity of the supply chain
Stage of processing of the product
Other relevant risk factors
Any risks identified must be mitigated and reduced to no or negligible levels.
Submission of Due Diligence Statement (DDS)
Before importing, exporting, or placing products on the EU market, operators and large traders must submit a DDS through the EU TRACES system. EUDR clearly defines what information needs to be collection as part of the DDS. You can check Annex 2 of EUDR for more information.
Record keeping
Operators and large traders must maintain all due diligence-related documentation (records, measures, procedures, etc.) for at least five years. These records must be readily available for submission to competent authorities upon request.
To ensure compliance, companies should establish an internal EUDR due diligence system.
Reporting
Large operators and traders must publish an annual report detailing their anti-deforestation efforts. This report must be made publicly accessible on their company website.
Not sure which EUDR obligations apply to you?
Step 4: Take Compliance Action
At this stage, it’s time to engage with your suppliers and implement the systems and processes needed to meet EUDR requirements. This step is crucial for collecting accurate data, mitigating risks, and ensuring your supply chain is fully compliant.
Develop Your Information Collection Methods
Before reaching out to suppliers, define how you will collect, store, and manage data internally:
Determine which information is required (supplier details, production plots, certifications, etc.)
Decide where and how this data will be stored securely for easy access during audits or reporting
Implement a clear process to track updates and changes over time
Engage and Onboard Your Suppliers
Working closely with your suppliers is key to EUDR compliance. Consider the following:
Communicate EUDR obligations clearly and include them in purchase contracts
Offer guidance and training on data collection, including geolocation coordinates and proof of compliance
Identify user-friendly tools or apps suppliers can use to capture geolocation and other required data
Provide ongoing support to suppliers to ensure accurate, timely, and verifiable information
Assess Deforestation Risk
Decide how you will evaluate deforestation risks:
Can you hire a satellite monitoring agency or use a specialised EUDR compliance solution?
If not, can you conduct the assessment in-house cost-effectively? Numerous open-source tools are available to support monitoring and risk analysis
Verify Supplier Information
Develop a structured method to check the legality and accuracy of supplier-provided data:
Supplier questionnaires
Audits or site visits
Third-party certification schemes (e.g., FSC, PEFC)
Creating a standardised template for verification ensures consistency across your supply chain.
Register and Submit DDS Information
Even before full EUDR compliance begins, you can register with the EU TRACES system and start uploading dummy DDS submissions. This allows you to:
Familiarise yourself with the system interface and submission process
Identify any missing or incomplete information in advance
Make necessary adjustments before the regulation goes live, ensuring a smoother compliance process
Getting a head start helps reduce errors and avoids last-minute complications once EUDR obligations officially apply.
Don’t have the resources for EUDR compliance tools? Need cost-efficient support to meet EUDR requirements?