In brief: The European Union Deforestation Regulation (EUDR), a central part of the EU Green Deal, is expected to come into force on 30 December, 2025. Many countries and businesses affected by the regulation have been preparing to comply since 2023 when it was first announced. Those that have delayed preparations have very little time to catch up.
Latest: On 23 September, 2025 the European Commission announced it is considering a proposal to delay the regulation’s effective date by one year. It has not yet submitted a formal proposal to the EU legislators and it’s not clear if or when it intends to do so.
Action: With an effective deadline just three months away, do not delay or stop preparations to comply. Learn more below.
What Is the EUDR?
The EU Deforestation Regulation (EUDR) was adopted by the European Parliament in 2023. Its main goal is to protect forests and biodiversity worldwide by stopping deforestation linked to agricultural products sold in the EU. It represents a pivotal shift in how businesses must approach sustainability, with far-reaching implications for supply chains, operations, and legal compliance.
The EUDR acts as a detailed regulation (Lex Specialis) for the broader, more general duty of care established by the Corporate Sustainability Due Diligence Directive (CSDDD) (Lex Generalis), specifically for the critical issue of deforestation (we discuss CSDDD here). It also strengthens the EU’s sustainability reporting standards (ESRS) by making sure companies are fully transparent about their risks related to deforestation.
Under the EUDR, Operators (entities that place relevant products on the market or export them) and Traders (entities that make products available on the market) must demonstrate that these products are traceable to deforestation-free supply chains. The definition covers relevant commodities such as cattle, cocoa, coffee, oil palm, rubber, soy bean and wood as well as derived products, regardless of quantity or value. For example, if a company imports rubber for seals in the machines they sell, or if a company operates a cafeteria that sells coffee to its employees, they fall within the scope of the regulation.
The regulation demands that businesses prove, via robust due diligence processes and submission of a due diligence statement into the deforestation registry, that the raw materials they source do not contribute to deforestation in sensitive ecosystems worldwide. This includes demonstrating that goods are not linked to illegal deforestation activities and that they do not contribute to significant forest degradation.
The regulation applies to all companies that place or sell products on the European market, regardless of company size or value of products. However, some deadlines and obligations differ:
- Large companies and upstream operators must comply starting on 30 December 2025, and generally must exercise robust due diligence and submit a due diligence statement.
- Micro, small and medium enterprises (as defined in the regulation) and downstream operators or traders have a compliance date of 30 June 2026 and simplified due diligence requirements or exemptions from submitting a due diligence statement if due diligence was already performed upstream.[i]
Why Is the EUDR Important?
The EUDR aims to not only curtail environmental harm but also to create a market shift that rewards sustainable, ethical sourcing practices.
From an environmental standpoint, it represents a critical effort to slow the rapid deforestation that contributes to biodiversity loss, carbon emissions, and climate change. The EU is one of the world’s largest consumers of products linked to deforestation, and this regulation aims to reduce the EU’s environmental footprint by ensuring that only sustainably sourced goods enter its market.
For businesses, compliance with the EUDR is now a non-negotiable requirement if they want to continue to access the EU market. Businesses will need to account for their entire supply chain, even if their suppliers are based outside the EU, underscoring the regulation’s global scope and intent. Failure to meet the regulation’s standards could lead to legal penalties, damaged reputations, loss of market access, and supply chain interruptions, e.g., if non-compliant products are confiscated at the EU’s borders.
What challenges are companies facing?
As with all sustainability regulations, companies will need to overcome unique to their business circumstances and challenges before they are able to achieve compliance — another reason not to wait until the last minute. The good news is that some of the groundwork (data collection, supply chain or activity mapping) may have been established if companies are already reporting under existing regulations like CSRD, EU Taxonomy and national supply chain laws. Common challenges include:
- Complex supply chains: Many companies source raw materials from multiple regions. Tracking and verifying each step in the supply chain to identify the ones where deforestation is prevalent or biodiversity is at risk can be an arduous task, especially when dealing with indirect suppliers or fragmented sourcing models.
- Data collection and transparency: The EUDR requires businesses to provide concrete evidence of deforestation-free supply chains down to geolocation level. This requires extensive data collection, traceability mechanisms, and, often, new technologies to monitor supply chains in real time. In certain countries around the globe, geolocation using GPS poses a particular challenge.
- Jurisdictional risks: For multinational companies, ensuring compliance with the EUDR across different regions can be difficult. One of the EUDR’s requirements is that the commodity must meet both local laws in the country of production and EUDR standards, which can lead to confusion about law precedence.
- Audit and certification requirements: The regulation states that the role of certification is complementary, not substitutive of the due diligence obligation, however companies will likely require supporting third-party audits, certification schemes, and documentation of deforestation-free practices, creating logistical and administrative burdens.
How to approach the new regulation
Navigating the EU Deforestation Regulation (EUDR) requires a blend of regulatory expertise, technology, and rigorous audit processes. Companies should initiate the following activities, if they have not already:
- Convene cross-functional workshops for procurement, legal and executive teams and present a tailored overview to each team of EUDR’s scope, due-diligence workflows and reporting obligations.
- Compile a comprehensive list of products and materials subject to EUDR. This may include anything from paper in the company printer to leather buttons used by a clothing manufacturer.
- Compile a comprehensive register of direct and indirect suppliers of the EUDR-relevant commodities you’ve identified and overlay country-level deforestation risk ratings to flag high-risk vendors.
- Capture origin data, batch IDs, certification references and other EUDR required data in a unified system.
- Audit chain-of-custody certificates, purchase orders and due-diligence reports for completeness and integrate a traceability solution via APIs into ERP or procurement platforms.
- Leverage existing risk management systems by embedding EUDR-specific deforestation risk criteria and due-diligence workflows into current ERM frameworks.
- Establish an internal audit calendar for the due diligence system. Conduct audits for medium- and high-risk commodities by sampling due-diligence files and logging findings by severity.
- Drive corrective actions to closure and assemble a complete dossier for external review.
- Establish processes for ongoing education, monitoring and review.
Businesses must act quickly
With only three months before EUDR becomes a reality, businesses must act quickly now to ensure compliance. Operations, procurement, risk and legal leaders should convene immediately to assess their level of preparedness and their tolerance for the consequences if not ready. Approaching the required activities with a mindset of sustainability and stewardship to the Earth’s resources will certainly make the work toward compliance more meaningful, with the added benefit of elevating the brand in the eyes of consumers and customers.
How Protiviti can help
Protiviti helps clients navigate the complexities of EUDR and other sustainability regulations with effective and integrated solutions that protect your business, reputation, and the environment. Our experts can assist with regulatory analysis, executive training, gap analysis, risk scoring, data system implementation and audit readiness. To start a conversation, reach out to the authors or contact us on our website.
[i] Refer to the EUDR FAQ document for specific definitions of upstream and downstream operators and traders: https://circabc.europa.eu/ui/group/34861680-e799-4d7c-bbad-da83c45da458/library/9cd9c929-75d7-4e37-b1f1-74307537235d/details.
