EUDR: New EU Regulation Against Deforestation - What Does It Mean for Businesses?

On May 31, 2023, the European Union adopted Regulation (EU) 2023/1115, a significant step in combating global deforestation and forest degradation (EUDR). This regulation replaces the Timber Regulation (EUTR) No. 995/2010 and expands the rules to include more raw materials potentially linked to deforestation.

What Does the Regulation Entail?

The regulation governs the placing on the market and export of products and raw materials that may be linked to deforestation and forest degradation. The aim is to ensure that products sold on the EU market or exported from the EU do not contribute to deforestation and are legally sourced. The regulation applies to various high-risk raw materials, such as soy, cocoa, coffee, timber, palm oil, and beef.

Timeline and Implementation

According to the current situation, the EUDR applies to all timber products harvested from June 29, 2023, and placed on the EU market from December 30, 2024. After numerous requests for postponement, the European Commission submitted a proposal on October 4, 2024, to the European Parliament and the Council to delay the regulation by 12 months. In practice, this would mean the EUDR will come into effect on December 31, 2025.

On November 14, the European Parliament approved the proposal to delay the EUDR’s entry into force. Additionally, the Parliament also supported several relaxations, including the addition of a "no risk" category, alongside the low/standard/high risk categories.

These changes still need to be approved by the Council and the Commission, so they are not yet definitive. If no decision is made in time regarding these amendments, the legislation could still come into effect at the end of the year.

Obligations for Businesses (Operators)

The regulation imposes three key obligations on businesses:

1. Due Diligence: Businesses must prove that their products do not contribute to deforestation by, among other measures, collecting geographical information about the origin of raw materials.

2. Traceability: Businesses must be able to trace the entire supply chain of their products to demonstrate that they do not originate from recently deforested areas.

3. Compliance with EU Criteria: Raw materials must be produced according to criteria that prevent deforestation and forest degradation.

Enforcement and Sanctions

Member States are responsible for enforcement and must establish sanctions for non-compliant companies. These sanctions may be administrative or financial and are intended to discourage unsustainable practices.

Conclusion

This regulation promotes sustainability and provides businesses with an opportunity to build more transparent and environmentally friendly supply chains. Denderwood will continue to monitor developments related to this regulation and share important updates. For further questions regarding this new legislation, feel free to contact us.