EUDR compliance: Essential guide to EU Deforestation Regulation
Book a demoThe EU Regulation on Deforestation-Free Products (EUDR) will enter into obligation on 30 December 2025 for medium and large-sized companies.
What makes this law different?
The EU Deforestation Regulation (or Regulation on Deforestation-Free Products) is a law that sets rules for due diligence. It aims to create fair competition. The regulation also seeks to reduce imports of products that contribute to deforestation.
Producers must also adhere to the existing laws of the producing country. The reversed burden of proof further distinguishes this law.
Reversed burden of proof
The law shifts the burden of proof to the defendant, requiring them to provide accurate data. This data must show that no deforestation happened after the cut-off date. You must submit it before making shipments.
Commodities covered
The EUDR applies to cocoa, coffee, palm oil, rubber, soy, wood, cattle, and their derivatives or embedded products.
Cut-off date for deforestation
31 December 2020
Penalties
Non-compliance may incur fines of up to 4% of EU turnover. It can also lead to temporary bans from public contracts or funding. Additionally, authorities may confiscate goods.
Your roadmap to compliance: EUDR risk management steps
Understanding and adhering to the European Union Deforestation Regulation (EUDR) requires a meticulous approach. Here's a breakdown of the three-step process:
Information collection
Article 9 outlines the collection of data (e.g. through farm mapping by a third party or licensing mapping software), documents, and information demonstrating product compliance.
This includes detailed descriptions, quantities, country of production identification, geolocation of production sites, supplier information, and proof of deforestation-free products.
Risk assessment
Article 10 mandates operators to verify and analyse collected information.
This involves assessing various factors, such as country risk levels, proximity to forests, presence of indigenous peoples, prevalence of deforestation, and supply chain complexity.
Risk mitigation
Additionally, Meridia Verify® provides custom advice on risk mitigation tailored to the risks identified in step 2.
Should the risk assessment unveil significant risks, operators must take mitigating actions as per Article 10a.
This may include providing additional information, conducting independent surveys or audits, or supporting supplier compliance through capacity building and investments.
Meridia Verify® EUDR risk assessment!
Learn moreVerify field and physical flow data & validate EUDR compliance – in real time.
Key questions and answers about EUDR compliance
Cocoa, coffee, palm oil, rubber, soy, wood, cattle, charcoal, printed paper products, and their derivatives or embedded products.
The regulation took effect for medium and large companies on 29 June 2023. They must comply by 30 December 2025. It applies to all commodities crossing EU borders after enforcement, including imports and exports. The 18-month activation period regulates cocoa harvested for the 2024 main crop.
‍
For SMEs, compliance becomes mandatory by 30 June 2026.
The cut-off date for deforestation under the EUDR is 31 December 2020.
The law reverses the burden of proof, placing it on the defendant. They need to provide correct information to the National Competent Authority. This information must prove that no deforestation occurred after the cut-off date. They must do this before shipping the products.
The EUDR legislation and the published FAQ stipulate the following key aspects for compliance:
- Data quality - “Ensuring the truthfulness and precision of geolocation information is a crucial aspect of the responsibilities that operators and traders must fulfil. Providing incorrect geolocation details would constitute a breach of the obligations under the Regulation.”
Source EUDR FAQ, 02 October 2024
- Deforestation - Clear and reliable information that shows the products do not cause deforestation.
Source EUDR Article 9(1)g
- Legality - Having clear and verifiable information. This shows that the producers made the goods according to the relevant legislation of the country where they produced them.
Source EUDR Article 9(1)h
- Traceability - Traders must collect and keep information. This helps ensure that the supply chain of products is transparent and open.
Source EUDR Article 1 (53)
You must implement a Due Diligence System (DDS) to demonstrate that you legally source and fully trace your products. Operators and traders follow a structured three-step process:
1. Gather all necessary information.
This includes information about where the product comes from.
It also shows the exact place where someone grew it, manufactured it, or processed it. The EUDR requires operators to create a Due Diligence System. This system helps them import only goods that are in line with the regulation. They must also give a due diligence statement to the relevant National Competent Authority.
2. Use Meridia Verify® to check field data quality and perform a thorough risk assessment. Evaluate factors like country risk, forest proximity, indigenous populations, deforestation, corruption, law enforcement, human rights issues, supply chain complexity, and circumvention risks.
3. Mitigate identified medium, high, and critical risks. Use appropriate measures based on the findings from verification and risk assessment.
Once all steps are complete, operators and traders must submit a due diligence statement confirming compliance with EUDR standards. You must provide this statement before placing goods on the EU market or exporting them.
Operators and traders must also prove that their products come from land not deforested after 31 December 2020.
‍
The EUDR penalties for not following the rules include fines of up to 4% of EU sales. There can also be temporary bans from public contracts and funding. Authorities may confiscate goods as well.
To comply with the EUDR, operators must gather accurate data. This data shows that products meet the rules in Article 9.
‍
After finishing the due diligence process, operators must submit a Due Diligence Statement. This statement confirms compliance before they can place goods on the EU market or export them. This includes:
- Description: Trade name, type, and, if applicable, the common and scientific names of wood species used.
- Quantity: Expressed in net mass, volume, or number of units.
- Country of production identification, including specific parts if relevant.
- Geolocation of production plots, with automatic disqualification for any associated deforestation or forest degradation.
- Details of suppliers and recipients of the products.
- Confirmation of deforestation-free status and compliance with relevant production legislation.
Use Meridia Verify® to conduct an EUDR risk assessment. This advanced software streamlines data verification and compliance for EUDR validation. Verify covers cocoa, coffee, palm, soy and rubber from a wide range of origin countries.
‍
Verify helps companies quickly assess and address risks in agri-commodity field and supply chain data. Its easy-to-use SaaS portal and API immediately find errors, fraud, and non-compliance. It provides helpful solutions for significant risks, like risks of deforestation.
‍
Built to meet EU Deforestation Regulation standards, Verify ensures compliance with local laws and industry requirements. With Meridia’s decade of field and supply chain expertise, Verify simplifies navigating complex regulations.
Read more about our methodology.
We offer tailored advice to address risks identified during your field data verification with Meridia Verify®. This advice targets specific concerns to ensure your data complies with EUDR standards.
A substantiated concern is when individuals or organisations, such as NGOs, formally notify a National Competent Authority (NCA) that an operator or trader may be breaching the regulation’s requirements. The NCA must assess the concern’s credibility and, if justified, initiate an investigation into the suspected non-compliance.
‍Examples of substantiated concerns include:
- An operator puts goods on the EU market without full chain-of-custody visibility. This is a problem when upstream suppliers break the law. For example, they may produce on Indigenous peoples' land without proper permission.
This mechanism enables stakeholders to actively monitor and enforce compliance, strengthening the regulation’s effectiveness in tackling deforestation.