EUDR: The EU Deforestation Regulation

The EU Deforestation Regulation (EUDR) prohibits the placement on the EU market, or the export from it, of specific commodities associated with deforestation and forest degradation, fundamentally shifting global supply chain compliance.

Covered Commodities and Derived Products

The EUDR covers seven core agricultural commodities:

• Cattle
• Cocoa
• Coffee
• Oil Palm
• Rubber
• Soya
• Wood

Crucially, it also applies to a vast array of derived products, such as chocolate, furniture, printed paper, tires, leather, and cosmetics containing palm oil derivatives. (Annex I provides the exhaustive list via customs codes).

The Three Strict Requirements

Products can only enter the EU market if they meet all three criteria:

1. Deforestation-Free: Produced on land that was not subject to deforestation or forest degradation after the cut-off date of December 31, 2020.
2. Legally Produced: Produced in accordance with the relevant legislation of the country of production (including human rights and the rights of indigenous peoples).
3. Covered by a Due Diligence Statement: A formal declaration submitted to an EU information system confirming compliance.

Mandatory Geolocation Data

The most technically demanding aspect of the EUDR is the requirement for traceability to the exact plot of land. Importers must collect the geographic coordinates (polygons for plots >4 hectares, points for smaller plots) of the precise land where the commodities were produced. This data must accompany the product throughout the supply chain.

The Due Diligence Process

Operators must conduct a three-step due diligence process before placing goods on the market:

• Step 1: Information Collection: Gather supply chain data, including geolocation, quantity, supplier details, and proof of legality.
• Step 2: Risk Assessment: Evaluate the risk of non-compliance. This is influenced by the EU's benchmarking system, which classifies countries as high, standard, or low risk.
• Step 3: Risk Mitigation: If risk is non-negligible, take mitigation measures (e.g., independent audits, supporting suppliers). If risk remains non-negligible, the product cannot be sold.