EU Deforestation Regulation (EUDR)

Summary, Legal Obligations & Business Implications

Date: July 21, 2025

Introduction

The EU Deforestation Regulation (EUDR) is a landmark legal framework introduced by the European Union to curb global deforestation driven by EU consumption. Effective from December 30, 2024 (or June 30, 2025 for small businesses), the EUDR introduced strict due diligence, traceability, and sustainability requirements for operators and traders dealing in key forest-risk commodities.

This article outlines the core legal requirements, key compliance data, and the impact for companies both inside and outside the EU.

Key Legal Requirements of the EUDR

Scope: Applies to operators and traders handling the following commodities and their derivatives: Cattle, Cocoa, Coffee, Oil Palm, Rubber, Soya, Wood.

Legal Obligations:
1. Due Diligence System (DDS):

• Collect detailed information on product origin and legality.
• Assess and mitigate any risk of deforestation or illegal production.
• Maintain documentation and submit a DDS prior to placing goods on the EU market or exporting them.

2. Geolocation Requirement:

• Mandatory collection of precise GPS coordinates for the land used to produce the commodity.
• Single polygon or point for each plot (point allowed for plots <4 hectares).

3. Deforestation-Free Standard:

• Products must be produced on land not deforested after 31 December 2020.
• Compliance with local laws (land tenure, environment, labor, etc.) is mandatory.

4. Due Diligence Statement Submission:

• Must be filed electronically via the EU’s central information system before placing products on the market/exporting.

Data Requirements for Compliance

Operators must obtain the following from their suppliers or producers:

• Type and volume of commodity
• Country of production
• Geolocation coordinates of production plot(s)
• Production date
• Evidence of compliance with local laws
• Summary of risk assessment and mitigation measures
• Signed Due Diligence Statement

Failure to meet these requirements can result in fines of up to 4% of EU turnover, confiscation of products, and exclusion from public procurement.

Strategic Impact on Companies

For EU-Based Companies:

• Must implement compliant due diligence systems across supply chains.
• High risk if sourcing from countries with poor forest governance.
• Need to invest in supplier onboarding, traceability tech, and legal vetting.

For Non-EU Suppliers and Exporters:

• Risk of market exclusion if required data cannot be provided.
• Should proactively share geolocation, legal compliance documentation, and risk-related disclosures with EU buyers.
• Partnership with downstream customers is critical.

How to comply

Companies are advised to:

• Map supply chains and engage directly with upstream producers.
• Collect required data in structured formats.
• Invest in traceability tools and training for compliance personnel.
• Monitor EU updates on country risk classification and enforcement guidance.

For tailored support on EUDR strategy, compliance documentation, or due diligence system design, please contact us at info@rockwatercompany.com.