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EU Deforestation Regulation (EUDR) – Key Highlights
What Is the EUDR?
The EU Deforestation Regulation (EUDR) is a landmark law adopted by the EU on June 29, 2023, aimed at:
- Reducing the EU’s role in global deforestation.
- Enforcing sustainable and deforestation-free supply chains for certain high-risk commodities.
Objectives:
- Eliminate deforestation from supply chains entering or exiting the EU.
- Enforce traceability and due diligence.
- Uphold environmental and social legality in the production countries.
- Promote ethical sourcing and human rights.
Products in Scope:
The EUDR applies to 7 key commodities and their derivatives:
- Cattle – Meat, live animals, leather.
- Cocoa – Beans, paste, butter, chocolate.
- Coffee – All forms including substitutes.
- Oil Palm – Palm oil, nuts, glycerol, fatty acids.
- Rubber – Natural rubber and rubber articles (e.g., tires).
- Soya – Beans, oil, meal, residues.
- Wood – Logs, furniture, paper, packaging.
Timeline:
- June 29, 2023 – Regulation adopted.
- December 30, 2025 – Full compliance mandatory for large businesses.
- June 30, 2026 – Grace period ends for micro/small enterprises.
- 2026–2028 – EU to review implementation and adjust accordingly.
Compliance Requirements:
Companies must maintain records for 5 years including:
- Product description, quantity.
- Country and region of origin.
- Geolocation (GPS coordinates) of production sites.
- Production time period.
- Full supply chain information (suppliers and recipients).
- Evidence of deforestation-free and legal production.
Risk Categorization (Supply Chain Regions):
The EU will classify source regions into:
- High Risk – Likely linked to deforestation → strictest checks.
- Standard Risk – Default.
- Low Risk – Streamlined due diligence allowed.
This will influence where businesses choose to source from.
Who Must Comply?
|
Entity |
Responsibilities |
|
Economic Operators |
Conduct full due diligence, provide supply chain data, ensure legality & traceability. |
|
Large Traders |
Similar due diligence as operators, maintain records, cooperate with authorities. |
|
SME Traders |
Maintain supplier/buyer records, report risks, respond to requests. |
Non-compliance penalties:
- Fines up to 4% of EU turnover.
- Product seizure.
- Ban from public procurement or funding.
Freyr’s EUDR Compliance Services:
- Due Diligence Training – Build internal compliance capacity.
- Risk Assessments & Mitigation – Identify and reduce supply chain risks.
- Compliance Reporting Support – Accurate documentation & submissions.
- Regulatory Monitoring – Keep your team informed on evolving EUDR requirements.
Conclusion:
The EUDR marks a critical shift in sustainability enforcement. Businesses need to act now to:
- Reassess their supply chains,
- Build robust compliance frameworks,
- Avoid penalties and reputational damage,
- And seize the opportunity to lead in sustainable sourcing.
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