Regulation on Deforestation Free Products (EUDR)

The Regulation on Deforestation Free Products (EUDR) is the EU’s initiative to combat deforestation and forest degradation. Effective from December 2024, it requires companies to carry out extensive due diligence on their value chains for certain commodities, to ensure that their operations are not linked to recent deforestation.

Under the EUDR, the EU targets seven vital commodities, considered to be significant in terms of deforestation risk: soy, cattle, oil palm, wood, cocoa, coffee, natural rubber and derived products. Companies will be permitted to import, export, or sell these products within the EU market only if these products:

• are deforestation-free,
• are legally produced (in accordance with the relevant legislation of the country of production),
• are accompanied by a due diligence statement.

To meet the “deforestation-free” requirement, companies that import or process the aforementioned raw materials will need to prove that no forests were cut for these materials after the year 2020, by complying with certain due diligence requirements. As such the EUDR sets a crucial standard for sustainable sourcing and emphasizes the importance of environmental responsibility.

Although the EUDR is focused on the European market, the EUDR may also affect companies from outside the EU. In order to perform the required risk assessments and in order to issue due diligence statements, geographical data may have to be obtained from all companies in the supply chains of the EU companies. As the derived products of the product that fall within the scope EUDR can include a variety of other products, the number of companies that are affected by the EUDR can be massive.

As such, all companies in the supply chain of products that fall within the scope of the EUDR, need to make sure they are prepared for this new reality.

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