EUDR for Agriculture & Forestry

What is EUDR?

The EU Deforestation Regulation (EUDR), formally known as Regulation (EU) 2023/1115, is a landmark piece of European Union legislation designed to ensure that specific commodities and products sold or exported from the EU have not contributed to deforestation or forest degradation worldwide. It entered into force on June 29, 2023, with large operators required to comply by December 30, 2024, and small and micro-enterprises by June 30, 2025. The regulation replaces the earlier EU Timber Regulation and significantly expands the scope of due diligence obligations to cover a broad range of high-risk commodities and their derived products.

EUDR and the Agriculture & Forestry Industry

Agriculture and forestry sit at the very heart of the EUDR. The regulation was specifically designed to address the fact that agricultural expansion and logging are the primary drivers of deforestation globally. For businesses operating in these sectors, the EUDR introduces direct and far-reaching obligations that touch every stage of the supply chain, from land management decisions on the farm to the export of finished goods to EU markets.

The seven commodities placed at the center of the regulation are cattle, cocoa, coffee, palm oil, soya, wood, and rubber, along with a wide range of derived products such as leather, chocolate, furniture, paper, and tyres. For an agricultural cooperative in Brazil supplying soybean to European feed manufacturers, or a timber company in Indonesia exporting hardwood to furniture producers in Germany, compliance is no longer optional. Any operator placing these commodities on the EU market must prove that the land from which the product originates was not deforested or degraded after December 31, 2020.

Forestry companies face particularly complex challenges. A sawmill sourcing timber from multiple forest concessions must trace each batch of logs back to specific geo-referenced plots and verify that those plots have not experienced deforestation since the cutoff date. Agricultural producers growing commodity crops near forest boundaries must demonstrate, through satellite imagery and legal documentation, that their fields did not encroach on forested land after 2020. The regulation therefore reshapes sourcing strategies, supplier relationships, and operational workflows across the entire sector.

Key Requirements

• Due diligence statements: All operators placing regulated commodities or products on the EU market must submit a due diligence statement before each shipment. This statement confirms that the product is deforestation-free, produced in compliance with applicable laws in the country of production, and covered by complete traceability documentation.
• Geo-location data: Operators must collect and verify the precise geographic coordinates of all plots of land where the relevant commodities were produced. For large agricultural holdings this means polygon mapping; for smaller plots, point coordinates are acceptable. This data must be provided to EU customs authorities upon request.
• Traceability to plot level: Supply chain traceability must reach back to the actual plot of land, not merely to a country of origin or a regional aggregation point. A coffee roaster importing beans from Colombia must be able to identify the specific farms and their coordinates for every consignment it processes.
• Risk assessment: Before submitting a due diligence statement, operators must conduct a documented risk assessment that considers the country of production, product type, complexity of the supply chain, and the presence of forests in the area of production. High-risk sourcing regions require enhanced scrutiny and additional evidence.
• Risk mitigation measures: Where the risk assessment identifies a non-negligible risk, operators must implement concrete mitigation measures before proceeding. These may include independent third-party audits, satellite monitoring contracts, or supplier certification requirements aligned with recognised forest certification schemes such as FSC or PEFC.
• Record keeping: All documentation supporting a due diligence statement must be retained for a minimum of five years and made available to competent national authorities on demand.
• Legal compliance verification: Products must be produced in accordance with the relevant legislation of the country of production, including land use rights, environmental protection laws, labour rights, and anti-corruption rules. Operators must obtain and verify relevant legal documents from their suppliers.
• Trader obligations: Traders who are not small or micro-enterprises share the same obligations as operators. Smaller traders may pass on due diligence statements from the original operator, but they remain liable for the accuracy of the information they transmit downstream.

Implementation Steps for Agriculture & Forestry Companies

1. Map your commodity exposure: Conduct a full inventory of all products and raw materials your organisation sources, produces, or exports to identify which fall within the scope of the EUDR. Do not limit this review to your primary commodities. A forestry company producing both sawn timber and wood pellets must treat both product streams as regulated goods.
2. Classify your role in the supply chain: Determine whether your organisation acts as an operator (placing goods on the EU market for the first time) or as a trader (making goods already placed on the market available to other parties). Your compliance obligations differ depending on this classification, and some businesses will hold both roles simultaneously for different product lines.
3. Build a supplier mapping database: Create a structured database of all suppliers linked to regulated commodities. For each supplier, collect legal entity information, production country, and initial estimates of production location. This database becomes the foundation for geo-location data collection and risk assessment in later steps.
4. Collect geo-location data from all plot-level sources: Work directly with farmers, forest concession holders, and commodity aggregators to obtain GPS coordinates or polygon shapefiles for every production plot. Use standardised data collection templates and mobile data-gathering applications to reduce errors. Where suppliers are unable to provide this data, consider whether continued sourcing from those suppliers is viable under the regulation.
5. Conduct satellite-based deforestation checks: Use publicly available or commercially licensed satellite monitoring platforms, such as Global Forest Watch, Hansen Forest Loss data, or specialised compliance tools, to verify that no deforestation occurred on production plots after December 31, 2020. Document the methodology, data sources, and results of these checks in a format that can be presented to regulatory authorities.
6. Perform and document your risk assessment: Aggregate the findings from your supplier mapping and satellite checks into a formal risk assessment for each product category and sourcing region. Apply the European Commission's country benchmarking system once it becomes operational, which will classify countries into low, standard, and high risk tiers and determine the intensity of due diligence required for each origin.
7. Implement and record mitigation measures for identified risks: For any supply chain assessed as presenting a non-negligible risk of deforestation, implement documented mitigation actions before importing or selling the product in the EU. Typical measures include commissioning independent farm-level audits, entering into time-bound improvement plans with suppliers, and requiring certification to a credible forest or agriculture standard.
8. Register on the EU TRACES NT system and submit due diligence statements: Register your organisation on the EU information system designated for EUDR due diligence submissions. Before each relevant import or sale, submit a complete due diligence statement through the system. Retain the reference numbers associated with each submission as part of your compliance records.
9. Train procurement and compliance teams: Ensure that all staff involved in sourcing, logistics, customs clearance, and supplier management understand the regulation's requirements and the internal processes your organisation has put in place. Assign clear ownership for ongoing compliance monitoring and escalation of issues identified during routine checks.
10. Establish a continuous monitoring programme: EUDR compliance is not a one-time exercise. Set up recurring satellite monitoring reviews, annual supplier re-assessments, and internal audit cycles to ensure that your supply chains remain compliant as forest cover changes, supplier networks evolve, and new regulatory guidance is issued by the European Commission.

Frequently Asked Questions

Does the EUDR apply only to companies based in the EU?

No. The regulation applies to any operator or trader that places regulated commodities or products on the EU market or exports them from it, regardless of where that company is headquartered. A Brazilian soy exporter, an Indonesian palm oil processor, and a Congolese timber company are all affected if any part of their product reaches EU customers. Non-EU producers who wish to maintain market access must therefore comply with the same geo-location, traceability, and due diligence requirements as EU-based importers.

What counts as deforestation under the regulation?

The EUDR defines deforestation as the conversion of forest to agricultural use, whether human-induced or not. Forest degradation is defined separately and refers specifically to the conversion of primary forests or naturally regenerating forests into plantation forests or other wooded land. The key cutoff date is December 31, 2020, meaning that any conversion of forest land for commodity production that occurred after that date disqualifies the resulting product from the EU market. Land that was already used for agriculture before 2020 and has not expanded into forested areas since then is not affected by the deforestation definition.

Are certified products such as those carrying FSC or PEFC certification automatically compliant?

No. Certification under recognised forest management or sustainable agriculture schemes is valuable evidence that can support your due diligence and risk mitigation processes, but it does not replace the legal obligation to submit a due diligence statement. Operators must still collect geo-location data, conduct risk assessments, and submit statements for each consignment. Certification may reduce the burden of evidence gathering and can serve as a mitigation measure in higher-risk sourcing contexts, but it does not grant automatic compliance status under the EUDR.

What penalties apply to companies that fail to comply?

Member states are responsible for setting penalties, which must be effective, proportionate, and dissuasive. The regulation requires that maximum financial penalties amount to at least four percent of the total annual EU-wide turnover of the operator or trader in the preceding financial year. Additional sanctions include the temporary exclusion from public procurement procedures, confiscation of the non-compliant products, and confiscation of revenues generated from transactions involving those products. Serious or repeated infringements may also trigger reputational consequences through mandatory public disclosure of the non-compliance finding.

Summary

The EUDR represents one of the most significant regulatory shifts for the global agriculture and forestry sector in a generation, placing supply chain transparency and deforestation-free sourcing at the centre of market access to the EU. Companies that act now to build robust geo-location data systems, conduct thorough risk assessments, and strengthen supplier relationships will be well positioned to meet their compliance deadlines and protect their access to European customers. Proactive engagement with the EUDR is not merely a legal obligation but a strategic opportunity to demonstrate supply chain integrity and build the trust that increasingly discerning buyers, investors, and regulators demand.