The EU Regulation on Deforestation (EUDR) is a key piece of legislation aimed at preventing products associated with deforestation and forest degradation from being placed on the EU market and exported from the EU. Companies will have to prove the origin of selected commodities and products, including traceability to the place of production, and implement a due diligence system. It will also include assessing risks in the supply chain and taking action to mitigate identified risks. Without fulfilling these obligations, it will not be possible to legally sell the relevant products in the EU. EUDR sets a new standard for transparency and compliance across supply chains.
→ Affected areas: Selected commodities such as wood, coffee, cocoa, soybeans, palm oil, rubber, cattle, and products derived from them.
→ Affected entities: Economic operators and traders (i.e., importers, exporters, manufacturers, distributors, and traders), regardless of their size.
→ Effect: 30 December 2026 (micro and small enterprises will have an additional transition period of six months, until 30 June 2027).
Main obligations under the EUDR:
- Determining the impact of EUDR on the company
- Establishing a due diligence system (and maintaining appropriate documentation) that includes:
- Collection and verification of information on the origin of commodities and products
- Assessment of risks related to the origin of commodities and products
- Adoption of measures to mitigate identified risks
- Submission of a Due Diligence Declaration to the EU information system
! Penalties for non-compliance with the regulation include fines of up to 4% of annual turnover, confiscation of the relevant products concerned, confiscation of income derived from transactions involving the relevant products concerned, and temporary exclusion from public procurement processes and access to public funding.
Grant Thornton can help you prepare for your obligations under the EUDR Regulation. Cooperation may include comprehensive solutions as well as partial support focused on specific areas of EUDR.
