The EU Deforestation-Free Regulations (EUDR) - What You Need to Know?

Picture a future where every item on the market has a proven track record of protecting our forests and preserving biodiversity. The European Union Deforestation-Free Regulation (EUDR) is not just another compliance requirement—it’s a bold step towards ensuring sustainable and ethical global supply chains. The EUDR mandates that businesses operating within the EU market must demonstrate that their supply chains are free from deforestation and land degradation. By targeting key commodities such as palm oil, soy, coffee, cocoa, rubber, and beef, the regulation aims to curb the destruction of the world’s vital ecosystems.

The EU Deforestation Regulation (EUDR) came into force on the 29th of June 2023 and on the 30th of December 2025 businesses will have to comply with all the requirements of the regulation. 

For many businesses, adapting to these rigorous standards can seem overwhelming. Whether you’re a procurement head scrambling to ensure your supply chains meet new sourcing standards, a sustainability leader navigating complex compliance requirements, or a compliance officer facing the pressure of hefty fines, the EUDR presents a significant challenge.

That’s why we’ve created this comprehensive guide to help you navigate the EUDR landscape. From assessing your supply chain risks to implementing traceability technologies, this blog offers actionable insights and practical steps to ensure your business stays compliant and future-proof. Dive in and take the first step towards building a sustainable, deforestation-free supply chain!

Key Takeaways

Understanding Deforestation

What is the EU Deforestation Regulation?

Scope of EUDR

What are the Requirements for EUDR Compliance?

Roadmap to Achieve EUDR Compliance

Challenges and Concerns

Traceability for EUDR

Understanding Deforestation

Forests act as carbon sinks, absorbing and storing carbon dioxide, a major greenhouse gas. Their destruction contributes to global warming. Furthermore, forests are vital habitats for diverse species. Deforestation disrupts ecosystems, leading to species extinction. Protecting forests is integral to both climate action and the conservation of Earth’s biodiversity.

Deforestation contributes to around 10-15% of global greenhouse gas emissions, making it one of the largest sources of carbon emissions.

Deforestation refers to the deliberate and extensive removal of forests and trees from a specific area, often for agricultural, industrial, or urban development purposes. This practice has severe environmental consequences. It contributes to climate change by releasing stored carbon dioxide, disrupts ecosystems, causes habitat loss and fragmentation, endangers biodiversity, and can lead to soil erosion and altered water cycles. Deforestation is a major driver of global environmental degradation and poses significant threats to the planet’s health.

Stay ahead of the curve with our comprehensive e-book on the EU Deforestation-Free Regulation (EUDR).

Discover practical steps, strategies, and tools to ensure your business meets EUDR compliance.

Download now

What is the EU Deforestation Regulation (EUDR)?

The EU’s new deforestation legislation is part of a broader initiative aimed at tackling the environmental and social consequences of global supply chains. Its primary objective is to prevent European companies from importing goods associated with unlawful deforestation and forest decline.

This regulation targets seven commodities: soy, beef, palm oil, wood, cocoa, coffee, and rubber. Several products made from these commodities are also targeted, including leather, chocolate, tires, and furniture. 

Under the law, companies are mandated to conduct thorough due diligence assessments on their supply chains, ensuring that imported products adhere to local laws and regulations. Furthermore, companies are expected to evaluate the environmental and social ramifications of their supply chains and take corrective measures to mitigate adverse effects. Additionally, the legislation prohibits the introduction of products into the EU market that are linked to illegal deforestation or forest degradation. Large companies have an 18-month grace period to ensure compliance once the regulation takes effect, after which penalties may be imposed.

Scope of EUDR

The EU Deforestation Regulation (EUDR) represents a landmark step towards combating deforestation and promoting sustainable supply chains. This regulation casts a wide net, encompassing a range of commodities linked to deforestation, including soy, beef, palm oil, wood, cocoa, coffee, and rubber. Its primary objective is to prevent the sale of products associated with deforestation within the EU market.

By imposing stringent due diligence requirements on businesses, the EUDR aims to ensure that commodities are produced legally and sustainably. This includes traceability measures, risk assessments, and the development of deforestation-free supply chains. Compliance with the EUDR is mandatory for companies operating within the EU market, and non-compliance can result in significant penalties.

EUDR Scope: Commodities and Their Derivatives

The EU Deforestation-Free Regulation (EUDR) targets not just raw commodities but also their derivatives, ensuring that products entering the EU market are free from deforestation and degradation. Here’s a breakdown of the key commodities covered by the EUDR, along with their derivatives:

Soy

Commodities in Scope: Raw soybeans and soybean meal.

Derivatives: Soy-based products such as tofu, soy milk, soy protein, and soybean oil.

Why it matters: Soy is often used in animal feed, so the EUDR also impacts the livestock industry, especially in relation to beef, pork, and poultry.

Palm Oil

Commodities in Scope: Crude palm oil and palm kernels.

Derivatives: Refined palm oil, palm kernel oil, and products containing palm oil like cosmetics, biodiesel, and processed foods.

Why it matters: Palm oil is widely used across industries, from food to beauty products, and ensuring its deforestation-free status requires traceability throughout the supply chain.

Beef

Commodities in Scope: Fresh beef, beef cuts, and live cattle.

Derivatives: Processed beef products such as sausages, hamburgers, and leather.

Why it matters: Beef production is directly linked to deforestation in countries like Brazil, and its derivatives, including leather, also need to meet sustainability standards.

Coffee

Commodities in Scope: Raw coffee beans.

Derivatives: Processed coffee products like ground coffee, instant coffee, and coffee-based beverages.

Why it matters: Coffee farming, especially in tropical regions, can contribute to deforestation, and ensuring its compliance is crucial for ethical sourcing.

Cocoa

Commodities in Scope: Raw cocoa beans.

Derivatives: Chocolate, cocoa butter, cocoa powder, and other cocoa-based products.

Why it matters: The demand for chocolate products has led to increased deforestation in regions like West Africa, making traceability and certification key for cocoa producers.

Rubber

Commodities in Scope: Raw rubber (rubber latex, solid rubber).

Derivatives: Processed rubber products like tires, rubber gloves, footwear, and industrial goods.

Why it matters: Rubber is often harvested in areas where forests are cleared for plantations, and its derivatives are widely used in various industries, necessitating sustainable sourcing.

Wood

Commodities in Scope: Raw timber and wood products.

Derivatives: Paper, furniture, wooden flooring, and wood-based construction materials.

Why it matters: Logging and deforestation for timber production are a major environmental concern. Ensuring that wood and paper products are sourced sustainably is critical for companies in construction, publishing, and furniture-making industries.

Who Needs to Comply with the EUDR?

The EUDR applies regardless of whether the raw materials originate from within the EU or elsewhere. The EU Deforestation-Free Regulation (EUDR) has far-reaching implications for companies involved in the trade of certain key commodities. It sets out clear requirements for different stakeholders across the supply chain, from producers to importers and other intermediaries.

EU-based companies: Any company operating within the EU that imports, sells, or exports these commodities falls under the EUDR.

International companies: Companies outside the EU that want to sell these commodities in the EU market must also comply with the regulation.

Operators vs. Traders: The EUDR makes a distinction between the first point of entry into the EU market (“operators”) and subsequent resellers (“traders”). Both operators and traders have specific requirements to fulfil.

Essentially, if your business deals with these commodities in the EU market, you need to understand and comply with the EUDR.

Importers into the EU Market

Who they are: These are companies or organizations that import specific commodities (soy, palm oil, cocoa, coffee, beef, rubber, and wood) or their derivatives into the European Union.

Why they need to comply: Importers are the first point of contact with the EU market and are legally required to prove that the products they bring into the EU do not contribute to deforestation or land degradation. They must provide detailed information about the origin of the goods, including geolocation data, and ensure that they have been sourced sustainably.

What they must do:

Conduct due diligence on their suppliers.

Gather and submit traceability data to prove the deforestation-free status of the commodities.

Ensure compliance by meeting the EU’s deadlines for verification and certification.

Producers (Farmers, Suppliers, and Manufacturers)

Who they are: This group includes farmers, plantations, ranchers, and other producers involved in the cultivation or harvesting of commodities like soy, palm oil, cocoa, and beef, as well as manufacturers who process these raw materials into final products.

Why they need to comply: Producers are directly responsible for the sustainable sourcing of these products. They must demonstrate that they are not contributing to deforestation or illegal land use changes.

What they must do:

Ensure their production processes do not result in deforestation.

Provide documentation or certifications proving the legality and sustainability of their operations.

Collaborate with downstream buyers and traders to guarantee transparency and traceability.

Supply Chain Intermediaries

Who they are: Supply chain intermediaries include transporters, traders, processors, and other entities involved in moving goods through the supply chain before they reach their final destination (retailers, wholesalers, or consumers).

Why they need to comply: These intermediaries handle the commodities at various stages of the supply chain and play a crucial role in maintaining traceability and transparency. They need to verify that the goods they are handling comply with the EUDR and meet sustainability standards.

What they must do:

Maintain clear records of where products come from.

Ensure that goods being transported, processed, or traded are linked to verified sources that meet deforestation-free criteria.

Retailers and Brands

Who they are: Retailers and brands, particularly those that sell products like food, cosmetics, fashion, and furniture, are affected by the EUDR if they sell any products made from the commodities listed in the regulation.

Why they need to comply: While retailers may not be directly involved in the production or importation of these goods, they are still responsible for ensuring that the products they sell do not contribute to deforestation. With growing consumer demand for sustainable products, businesses in this category must verify that their supply chains are EUDR-compliant.

What they must do:

Ensure that their suppliers are meeting the deforestation-free requirements.

Implement systems to verify the sustainability credentials of their products.

Be prepared to provide information about the traceability and origin of the commodities they sell.

Financial Institutions and Investors

Who they are: Banks, investors, and financial institutions that finance or invest in businesses involved in producing or trading commodities covered by the EUDR.

Why they need to comply: Financial institutions are increasingly being held accountable for the environmental impacts of their investments. As more funds are directed toward sustainable businesses, financial entities must ensure their investments are aligned with regulations like the EUDR.

What they must do:

Evaluate the environmental risks associated with their investments.

Support companies in complying with sustainability and deforestation-free sourcing regulations.

Integrate deforestation-free criteria into their investment and financing decisions.

Certification Bodies and NGOs

Who they are: Third-party certification bodies, NGOs, and environmental organizations play an important role in the verification process.

Why they need to comply: These entities are responsible for providing certifications and verifying the sustainability of commodities. They are key players in ensuring compliance with the EUDR and helping businesses meet its requirements.

What they must do:

Certify products as deforestation-free.

Provide training and tools to businesses to help them comply with the EUDR.

Collaborate with authorities to ensure transparency in the certification process.

What are the Requirements for EUDR Compliance?

The EU Deforestation Regulation (EUDR) outlines a series of requirements for companies placing agricultural commodities on the EU market. These requirements aim to promote transparency, traceability, and responsible sourcing practices throughout the supply chain.

Information Collection (Article 9): Companies must gather detailed information about their commodities, including:

Product Description: A clear description of the commodity being imported or used.

Origin Tracking: The country of production where the raw materials were grown or harvested.

Traceability: Geographical coordinates of the cultivation areas for precise origin identification.

This information lays the foundation for transparency and allows authorities to track commodities throughout the supply chain.

Risk Assessment (Article 10): Companies must conduct a risk assessment to identify the potential for non-compliant products or processes entering their supply chain. The assessment should consider factors like:

Protected Areas: Presence of protected forests or conservation zones near cultivation areas.

Deforestation Rates: Historical and ongoing deforestation rates in the region of origin.

Sustainability Standards: Compliance with existing sustainability certifications relevant to the commodity.

By understanding these risks, companies can take targeted action to mitigate them.

Risk Mitigation Strategies (Article 11): Based on the risk assessment, companies must implement measures to address potential non-compliance. This may involve:

Sustainable Sourcing: Prioritizing suppliers with certifications demonstrating responsible forestry or farming practices.

Sustainable Farming Practices: Promoting or implementing sustainable agricultural practices that minimize environmental impact.

Traceability Mechanisms: Establishing robust systems to track commodities from origin to final product.

These mitigation efforts must be documented in a Due Diligence Statement (DDS) submitted to the EU.

Due Diligence Statement Submission: Companies must submit a DDS to the EU Information System, formally declaring their compliance with the EUDR. This statement serves as a record of their due diligence efforts and commitment to responsible sourcing.

By fulfilling these EUDR requirements, companies can ensure their products meet EU deforestation-free standards and contribute to a more sustainable future.

EUDR compliance involves a rigorous due diligence process for companies to ensure their products are sourced ethically and sustainably, particularly in terms of deforestation.

Country benchmarking for risk assessment under the EU Deforestation Regulation (EUDR) is a process where countries are classified based on their likelihood of contributing to deforestation. The European Commission (EC) assigns countries a risk rating—low, standard, or high risk—which determines the level of due diligence required from operators sourcing from these regions.

EUDR Penalties

The EU takes enforcement of the Deforestation Regulation (EUDR) seriously. To deter violations, regular inspections are conducted. Companies found non-compliant face a range of penalties, varying in severity based on the specific infringement and decided by each EU member state

Financial Sting: Hefty fines of up to 4% (and potentially even higher at a member state’s discretion) of your company’s total annual revenue. The fine amount considers the environmental damage caused and the value of the non-compliant goods.

Seized Goods, Seized Profits: Authorities may confiscate both the non-compliant commodities and any profits earned from their trade.

Public Funding Freeze: Companies could be excluded from accessing public procurement opportunities and public funding for up to a year.

Market Exclusion: In severe cases, companies’ risk being banned from selling the specific infringing goods and products within the entire EU market.

Due Diligence Downgrade: Repeat offenders or those with serious violations may lose the privilege of using simplified due diligence procedures, requiring a stricter approach.

Remember, complying with the EUDR isn’t just about avoiding penalties; it’s about demonstrating your commitment to a sustainable future.

Challenges and Concerns

Companies may encounter challenges when attempting to trace the source of their products and to confirm their compliance with local laws and regulations.

The feasibility of monitoring global supply chains effectively potentially raises costs for businesses.

Another challenge is to prevent the law from causing deforestation to shift to other regions. If companies can’t import products from non-compliant countries, they might seek these products from other nations with lower environmental standards.

Furthermore, the law might encounter resistance from countries that export these products to the EU. These nations might perceive the law as an encroachment on their sovereignty and could potentially contest it through trade disputes or other avenues.

Risks of unintentional market exclusion for small producers.

Balancing economic interests with environmental goals remains a key challenge.

Roadmap to Achieve EUDR Compliance

Achieving compliance with the EU Deforestation-Free Regulation (EUDR) involves multiple phases, each focused on ensuring your supply chain is fully transparent, traceable, and free from deforestation. This step-by-step roadmap will guide you through the process, from assessment to ongoing monitoring

Phase 1: Assessment – Understand Where You Stand

Map Your Supply Chain:
Start by identifying everyone in your supply chain—from raw material producers to traders and suppliers. Understand where your commodities are coming from and trace their journey until they reach your company. This helps pinpoint potential risks, like whether your suppliers operate in regions prone to deforestation.
Evaluate Risks:
Next, conduct a risk assessment of sourcing regions. Are your raw materials coming from areas known for high deforestation rates? Identifying such risks early on will help you focus your efforts on areas that require immediate attention.
Audit Existing Systems:
Take a close look at your current traceability systems. Do you have tools in place to track the origins of your products? If not, it’s time to assess what needs to be improved. If you do have systems, evaluate how well they can support the data and documentation required under the EUDR.

Phase 2: Planning – Prepare for Compliance

Develop a Compliance Strategy:
Once you have a clear understanding of your supply chain, it’s time to create a strategy for compliance. Define specific goals and set realistic timelines. You’ll need to establish both short-term and long-term objectives, such as ensuring that all suppliers provide traceability data by a certain date.
Select Tools and Technologies:
To meet EUDR’s traceability requirements, it’s important to choose the right tools. Blockchain technology, for instance, offers a secure and transparent way to track the origin of commodities. Other digital traceability solutions can also help you collect and manage the required data. Make sure to pick the tools that integrate seamlessly with your existing systems.
Engage Stakeholders:
EUDR compliance isn’t something you can do on your own—it requires collaboration. Work closely with your suppliers to ensure they understand the new requirements. Share best practices for data transparency and ensure they’re onboard with providing the necessary information about their sourcing.

Phase 3: Implementation – Put Plans into Action

Set Up Traceability Systems:
Now, it’s time to put your plan into action. Set up traceability systems that capture essential data like geolocation and commodity origin. This will ensure you can provide the required proof that your products are deforestation-free. Be sure to have robust systems that can handle real-time data collection and reporting.
Conduct Supplier Training:
Your suppliers are an integral part of your compliance journey. Offer them training sessions to ensure they understand the EUDR requirements and how to meet them. This will help ensure that everyone in your supply chain is aligned and that data is collected accurately.
Integrate with EUDR Reporting Systems:
To ensure your business is on track with the EUDR, integrate your traceability systems with EU reporting platforms. This will make it easier to submit compliance documentation and data to EU authorities. The smoother the integration, the easier it will be to stay compliant as regulations evolve.

Phase 4: Monitoring and Reporting – Ensure Ongoing Compliance

Set Up Traceability Systems:
Now, it’s time to put your plan into action. Set up traceability systems that capture essential data like geolocation and commodity origin. This will ensure you can provide the required proof that your products are deforestation-free. Be sure to have robust systems that can handle real-time data collection and reporting.
Conduct Supplier Training:
Your suppliers are an integral part of your compliance journey. Offer them training sessions to ensure they understand the EUDR requirements and how to meet them. This will help ensure that everyone in your supply chain is aligned and that data is collected accurately.
Integrate with EUDR Reporting Systems:
To ensure your business is on track with the EUDR, integrate your traceability systems with EU reporting platforms. This will make it easier to submit compliance documentation and data to EU authorities. The smoother the integration, the easier it will be to stay compliant as regulations evolve.

Tools and Technologies to Simplify EUDR Compliance

Achieving compliance with the EU Deforestation-Free Regulation (EUDR) can be complex, but several tools and technologies can help streamline the process. These technologies offer transparency, traceability, and real-time monitoring, ensuring that businesses can meet regulatory requirements efficiently.

Blockchain for Traceability: Real-Time Monitoring of Supply Chains

Blockchain technology provides an immutable, transparent record of transactions that is particularly useful for traceability in supply chains. By using blockchain, businesses can track the entire journey of a commodity from its source to its final destination, ensuring that it’s sourced sustainably and in line with EUDR requirements.

Real-time Monitoring: Blockchain enables continuous, real-time tracking of goods as they move through various stages of the supply chain. This helps businesses ensure that each step of the journey is fully documented and compliant with deforestation-free standards.

Enhanced Transparency: All parties involved in the supply chain, from producers to traders, can access the same verified data. This transparency reduces the risk of fraud and provides assurance that products meet the EUDR’s traceability and sustainability requirements.

Immutable Records: Once data is recorded on a blockchain, it cannot be altered, providing a reliable, tamper-proof audit trail that supports compliance audits and reporting.

Geolocation Tools: Mapping Deforestation-Free Sourcing Regions

Geolocation tools are key in mapping and verifying the origins of commodities. These tools utilize satellite data, GPS, and other location-based technologies to track the geographic coordinates of sourcing regions, ensuring that commodities are coming from deforestation-free areas.

Mapping Sourcing Regions: Geolocation tools help businesses pinpoint the exact locations from which raw materials are sourced. They can cross-reference this data with information on deforestation patterns, allowing companies to verify whether suppliers are operating in at-risk areas.

Environmental Monitoring: Many geolocation tools integrate with satellite imagery and environmental data to monitor land-use changes, deforestation rates, and other environmental factors in real time. This allows companies to act swiftly if their supply chain is impacted by deforestation in a certain area.

Compliance Verification: By using geolocation data, businesses can prove to regulators that their products come from sustainable sources, reducing the risk of non-compliance penalties.

Data Analytics Solutions: Risk Assessment and Compliance Reporting

Data analytics solutions play a critical role in evaluating supply chain risks and ensuring ongoing compliance with EUDR requirements. These tools analyze large volumes of data from various sources, such as geolocation, transaction records, and environmental factors, to assess potential risks and generate compliance reports.

Risk Assessment: Advanced data analytics can help companies assess risks associated with sourcing regions, suppliers, and the commodities themselves. By analyzing historical data and real-time inputs, these tools can identify patterns that may indicate potential deforestation risks in a supply chain.

Compliance Reporting: Data analytics tools can automate the generation of compliance reports, ensuring that all necessary data is collected and formatted according to the EU’s guidelines. These reports can then be submitted to EU authorities to demonstrate that a business is meeting the EUDR’s traceability and sustainability standards.

Predictive Insights: In addition to assessing current risks, data analytics tools can provide predictive insights into potential future issues, such as changes in environmental policies or deforestation trends, allowing businesses to proactively adjust their sourcing strategies.

TraceX EUDR Compliance Platform: Simplifying Sustainability and Traceability

The TraceX EUDR Compliance Platform is an advanced, blockchain-powered solution designed to help businesses meet the stringent requirements of the EU Deforestation-Free Regulation (EUDR). It offers an integrated approach to ensure supply chain traceability, deforestation-free sourcing, and compliance with EU regulations for commodities like soy, palm oil, cocoa, beef, rubber, coffee, and wood.

Key Features of the TraceX EUDR Compliance Platform

End-to-End Supply Chain Traceability

The platform uses blockchain technology to offer end-to-end traceability across your supply chain. This means businesses can track their products in real-time, ensuring that every commodity—from raw materials to finished products—can be traced back to its source. With the EUDR’s emphasis on transparency, having this level of traceability is crucial to demonstrate compliance.

Immutable Records: Blockchain ensures that data, once entered, cannot be altered, creating an indelible and transparent audit trail.

Real-Time Data: The system continuously updates data as products move through the supply chain, giving businesses up-to-date information on sourcing regions and sustainability practices.

Geolocation and Mapping Tools

To meet EUDR requirements, it is essential to track the geographical location of sourcing regions. TraceX integrates geolocation tools that allow businesses to map where their commodities are sourced and ensure that these areas are deforestation-free.

Mapping Deforestation-Free Zones: The platform allows businesses to identify whether commodities come from areas with deforestation risks. This enables compliance with EUDR’s requirement for sourcing materials from sustainable regions.

Satellite Data Integration: TraceX integrates satellite data to monitor land-use changes and deforestation trends in real time, ensuring that sourcing areas remain compliant with the regulation.

Risk Assessment and Monitoring

The risk assessment capabilities of the TraceX platform help businesses identify potential deforestation risks within their supply chains. By analyzing sourcing regions and environmental data, the platform provides actionable insights to mitigate risks and ensure continued compliance.

Risk Alerts: If a supplier or sourcing region shows signs of non-compliance or deforestation, the platform sends alerts, enabling businesses to take corrective action before problems escalate.

Continuous Monitoring: The platform offers continuous monitoring to track any changes that could affect the compliance status of the supply chain.

Compliance Reporting and Documentation

With TraceX, businesses can generate the required compliance reports for submission to the EU. The platform automates the generation of these reports, ensuring that all necessary documentation—such as geolocation data, commodity sourcing, and sustainability certifications—are included in the correct format and meet EU guidelines.

Automated Reporting: The platform automates the process of creating and submitting reports, saving time and reducing the risk of human error.

Real-Time Documentation: TraceX ensures that all data is captured and documented in real-time, so businesses can generate reports instantly when needed.

Supplier Engagement and Collaboration

TraceX offers features that facilitate supplier collaboration. It allows businesses to engage their suppliers directly through the platform, ensuring they are aligned on the data collection process and EUDR compliance requirements.

Supplier Training and Support: TraceX helps educate suppliers on the compliance requirements of the EUDR, ensuring they are capable of providing the necessary traceability and sustainability data.

Data Sharing and Transparency: Suppliers and businesses can securely share data through the platform, ensuring full transparency across the entire supply chain.

A Shared Responsibility: Building a Sustainable Future

Addressing deforestation and promoting sustainability are pivotal in the global effort to combat climate change and protect biodiversity. The EU’s Deforestation Regulation (EUDR) is a significant step toward these goals, offering a model for responsible supply chain management. Achieving a balance between environmental goals and economic interests is essential, and international cooperation is paramount. Both businesses and consumers have a role to play in fostering a more sustainable and eco-conscious world.

Frequently Asked Questions

What is the penalty for non-compliance with EUDR?

Non-compliance with the EU Deforestation-Free Regulation (EUDR) can result in significant penalties for businesses. The penalties typically include:

Fines: Companies found to be in violation of EUDR may be subject to hefty fines, which vary depending on the severity of the non-compliance and the scale of the business.

Bans on Market Access: If a company cannot demonstrate that its supply chain complies with the EUDR, they could be banned from selling the relevant products in the EU market.

Reputational Damage: Beyond financial penalties, non-compliance can lead to severe reputational damage, affecting relationships with customers, suppliers, and investors.

How can small businesses prepare for EUDR?

Small businesses can take several steps to prepare for EUDR compliance, even with limited resources:

Assess Current Supply Chains: Start by identifying where your raw materials are sourced and evaluate the sustainability of those sources.

Leverage Technology: Utilize cost-effective tools like TraceX’s EUDR compliance platform to simplify traceability and geolocation tracking in your supply chain.

Engage with Suppliers: Work closely with suppliers to ensure they understand the compliance requirements and are willing to provide the necessary traceability data.

Start with Key Commodities: If managing all commodities is overwhelming, prioritize the key commodities in scope (e.g., palm oil, coffee, beef) and gradually expand to include others.

Train Staff and Build Awareness: Educate your team about the regulation and its importance to ensure everyone is aligned and committed to compliance.

Are there any exemptions to the regulation?

The EU Deforestation-Free Regulation (EUDR) is comprehensive, but there are some exemptions and flexibility for specific cases:

Small Suppliers or Low-Risk Suppliers: The regulation is designed to target businesses that play a significant role in deforestation or have high-risk sourcing activities. Smaller businesses or those with low-risk sourcing may have simpler compliance requirements, though they still need to follow the general principles of traceability and due diligence.

Minimal Impact Products: Some derivative products with minimal environmental impact might not fall under the scope of the EUDR, depending on their specific characteristics and the level of traceability required.

Transition Periods: Businesses that are in the process of transitioning their supply chains to meet the regulation may be granted a period of time to achieve full compliance.