EU Deforestation Regulation (EUDR): New obligations for companies

From December 30, 2025, large and medium-sized companies in the EU will be obliged to implement the provisions of the new EU Deforestation Regulation (EUDR). An extended deadline until June 30, 2026 applies to micro and small enterprises. The regulation entails extensive reporting obligations.

Subsidiaries that produce or trade relevant raw materials are directly subject to the EUDR – regardless of whether they are based in the EU or in third countries. Parent companies must actively monitor and support compliance. Companies that already comply with other reporting requirements such as the Corporate Sustainability Reporting Directive (CSRD) or the Corporate Sustainability Due Diligence Directive (CSDDD) can integrate EUDR reporting into existing reports in the future.

The importance of EUDR

The EU Deforestation Regulation (EUDR) (EU 2023/1115) of June 29, 2023 replaces the EU Timber Regulation (EU 995/2010). Such regulation lays down binding rules for producers and traders of commodities such as wood, coffee, beef and soy in order to reduce the loss of biodiversity and greenhouse gas emissions. According to Article 1 of the EUDR, these products may only be produced and traded in the EU if they comply with both environmental and legal requirements.

What are the reporting obligations for companies?

The companies concerned are obliged to report annually on the measures taken to comply with the due diligence obligations. The report must contain the following:

• an overview of compliance with the criteria set out in Article 3 EUDR
• the conclusions of the risk assessment
• the measures taken to comply with the criteria

What key requirements does the EUDR place on companies?

• Deforestation-free products: Commodities must not have been produced on land that was deforested after December 31, 2020. 
• Legal compliance: Products must comply with the laws of the country of production
• Due diligence: Companies must ensure that commodities and products meet the requirements of the EUDR

Due diligence obliges companies to ensure the conformity of their products and compliance with the EUDR. They must assess potential risks of non-compliant products and take appropriate measures to minimize risks in accordance with Article 10 EUDR. Risk analysis is an essential part of the due diligence companies must implement as part of the EUDR. For traceability purposes, companies are obliged to record the geolocation of the land and the time of production of the relevant commodities. They must ensure traceability along the entire value chain and retain the relevant information for at least five years.

Which product groups are affected by the regulation?

The EUDR applies to a range of commodities and products made from them, including coffee, cocoa, palm oil, soy, beef, rubber and wood.
Over 800 product groups containing these raw materials are covered by the regulation. A complete list of the affected products and their customs numbers can be found in Annex 1 of the EUDR.

How is compliance monitored and what sanctions are imposed in the event of violations?

The responsible authorities check the due diligence declarations submitted on a risk basis. Depending on the deforestation risk in the country of origin, the scope of checks varies from up to 9 % of deliveries from high-risk countries, 3 % from countries with a standard risk and 1 % from low-risk countries. The corresponding checks are usually carried out before customs clearance, but can also take place unannounced during the year.

Companies that violate the EUDR may be subject to sanctions of up to 4 % of their total annual turnover. Sanctions can include fines, confiscation of goods, exclusion from public contracts and a permanent ban on trading the products in question on the EU market.

Conclusion

The EUDR marks a turning point in EU trade policy and underlines the commitment to sustainability and environmental protection. Originally planned for the end of 2024, it is not expected to take effect until December 30, 2025. This will ease the burden on companies as they will have more time to prepare for the requirements and integrate processes in a meaningful way. Nevertheless, they should use the deadline to involve suppliers, develop innovative solutions and strengthen their position in the sustainable market.

In the long term, the EUDR could serve as a model for regulations to combat deforestation worldwide. Companies taking action at an early stage will secure a competitive edge in a growing sustainable market.