What is the EU Deforestation act?

The European Union has introduced the EU Deforestation Regulation (EUDR) as a crucial step towards combating global deforestation and forest degradation. By 30 December 2024, this regulation imposes stringent due diligence requirements on companies that place specific commodities on the EU market. The EUDR is part of the EU’s broader strategy to curb environmental damage and ensure that goods sold within its borders are not linked to deforestation or forest degradation.

What products are in scope?

The commodities include cattle, wood, cocoa, soy, palm oil, coffee, rubber, and some of their derived products such as leather, chocolate, tyres, or furniture. A complete list can be found in Annex I of the EUDR.

What additional steps can an importer expect to have to take ?

Importers must ensure that all products are traceable back to their origin, specifically to the plot of land where the commodities were produced. This includes providing geolocation data for the production area.

Companies must assess and mitigate the risk that their products contribute to deforestation. This includes a thorough examination of supply chains, with a focus on legality and compliance with environmental standards in the country of origin.

Importers must submit Due Diligence Statements to the authorities, confirming that the products are compliant with EUDR requirements. References to these Due Diligence Statements need to be included in the import declarations by the customs broker in order to get the products released by the customs and other authorities.

Timeline for implementation

The Regulation was published in the Official Journal of the European Union on June 9, 2023, and came into force on June 29, 2023. However, the actual implementation will begin on December 30, 2024 for most companies (after an 18-month transition period) and on June 30, 2025, following a 24-month transition period for micro- and small enterprises.

Registration to use The Deforestation Due Diligence Registry will start in November 2024 and the system will be available for all users in December 2024.

How can you prepare?

Start by conducting a thorough review of your supply chains to identify and address any potential deforestation risks. Establish or upgrade internal systems for traceability, risk assessment, and reporting to ensure compliance.

Collaborate closely with suppliers to ensure they understand the new requirements and can provide the necessary documentation and data. Additionally, stay informed by keeping up to date with guidance from EU authorities to maintain compliance as the regulatory environment evolves.

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Non-compliance, what happens if you’re not ready?

Importers that do not comply with the EUDR risk facing severe consequences, such as fines, suspension of market access, and damage to their reputation. It is crucial for businesses to take proactive steps to understand and implement the necessary measures to ensure compliance and to avoid that products cannot be imported upon arrival into the EU.

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