The Regulation (EU) 2023/1115 on deforestation-free products (the “EUDR”) aims to stop goods that have been produced in a way which contributes to drive global deforestation and degradation from being traded within, or exported outside, the EU by union-based companies. Such trade will be strictly prohibited as the regulation comes into effect. To ensure the effectiveness of the regulation, actors in scope will have to perform comprehensive due diligence-processes.
After amendments adopted in December 2025, the EUDR is now set to apply from 30 December 2026 for large and medium-sized companies, and for small and micro-enterprises handling products previously covered by the EU Timber Regulation, and from 30 June 2027 for other small and micro-enterprises that trade in relevant products or commodities.
The amended regulation also contains additional simplifications, for example regarding the responsibility to submit a due
diligence statement and a simplified declaration for micro and small primary operators. In addition, the Commission is required to conduct a further simplification review and present a report by end April 2026.
The regulation covers certain raw materials, namely cattle, cocoa, coffee, oil palm, wood, rubber, and soya, including products wholly or partly derived from these raw materials, respectively referred to as “relevant commodities” and “relevant products”. Importers, EU-based operators and traders dealing in relevant commodities or products will be subject to supply-chain due diligence requirements to ensure compliance with the EUDR.
Whether goods are in scope of the EUDR depends primarily on the tariff code (HS/CN) of the finished product. Any products not listed in the Annex to the regulation are out of scope. A typical situation where products are out of scope is when a relevant raw material is transformed into or incorporated in a product that is not covered, such as hides being turned into shoes, cocoa and palm oil being used to make biscuits or forest biomass being used to produce district heating or electricity. The amended regulation further excludes certain printed products (such as books, newspapers and printed pictures) from the scope.
All goods produced after 31 December 2020 that contain relevant commodities or products which have contributed to deforestation will be prohibited after the key obligations of the EUDR start to apply.
Key obligations regarding mandatory due diligence-processes, which must be performed prior to placing relevant commodities or products on the EU market, or exporting them, to ensure that these are deforestation free, include:
For goods imported from outside the EU, a full due diligence process is required before further trade. If goods originate from upstream suppliers in the EU or if relevant goods are reimported to the EU, the first downstream company shall reference the supplier’s due diligence statements filed when the goods first entered the EU market. The following downstream companies in the supply chain are thus not obligated to keep records of the relevant due diligence statements, ascertain that due diligence has been exercised, or to submit any due diligence statements.
Nevertheless, these downstream companies are required to keep record of contact details to their suppliers, including their web addresses.
Operators sourcing exclusively from areas classified as low risk by the European Commission may perform a simplified due diligence for their goods. Currently, all EU Member States are classified as low-risk countries. Operators must, nonetheless, still collect information and assess the complexity of the supply chain and risks of circumvention. However, in the absence of indications that the traded goods are non-compliant, a simplified due diligence may be carried out.
The responsibility for compliance with the EUDR rests with each company along the value chain that trades with relevant commodities and products and this responsibility cannot be transferred to another company – e.g. a subsidiary.
Member States shall impose sanctions for trading in goods that are not “deforestation free”, including confiscation of goods and proceeds, exclusion from public procurement procedures, and fines of at least 4% of group-wide turnover in cases of repeated infringements.
Unlike many other sustainability frameworks in the EU such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D), the EUDR will in principle apply to all EU actors regardless of their turnover, balance sheet size, or employee count, even including natural persons.
The extent of the due diligence obligations is determined by both the activities and the size of the entity, inter alia reflecting a wider EU objective to limit administrative burden for smaller businesses as recently confirmed by the Commission’s Omnibus-packages.
The obligations under the EUDR attach to individual companies, irrespective of group structures. Within organisations, the obligations of subsidiaries must therefore be assessed individually based on the subsidiaries’ separate operations, turnover, and number of employees, rather than by reference to the group’s consolidated figures.
Actors in scope may, however, appoint a representative, which must be established in the EU, to submit and manage due diligence statements on their behalf in order to centralise the administrative burden.
In conclusion, the EUDR will impose product based supply chain due diligence obligations on EU operators and traders handling a defined set of relevant commodities and relevant products. The Commission’s country benchmarking, the central information system for reporting and evolving national enforcement practices will shape how the regulatory compliance plays out in practice.
Although the amendments to the EUDR include certain simplifications and entail that the date of application will be postponed to 30 December 2026 (and for micro and small operators to mid-2027), the rules remain complex.
Anna Jonsson
Partner
M&A / Corporate Commercial
Malmö
Johan Cederblad
Partner
Environmental Law
Stockholm
Martin Johansson
Partner
EU, Competition & Regulatory
Brussels
Anders Leissner
Expert International trade, Member
of the Swedish Bar Association
Gothenburg
