EUDR (EU Deforestation Regulation)
The EU Deforestation Regulation (EUDR) is European legislation that aims to reduce deforestation and forest damage by regulating the import of products associated with deforestation.
The EUDR is a central component of EU climate policy and aims to reduce deforestation worldwide. The regulation replaces the EU Timber Regulation and significantly expands its scope of application. Companies that import goods such as soy, palm oil, wood, cocoa, coffee or beef into the EU or sell them within the EU must prove that these products do not originate from areas that were deforested after December 31, 2020.
Key requirements of the EUDR include:
- Due diligence: Companies must conduct a thorough risk analysis of their supply chains, verify the origin of raw materials and ensure that they are not linked to deforestation.
- Geographic traceability: Companies must prove which specific geographic areas their raw materials originate from, often through GPS data.
- Reporting requirements: Regular reports on supply chains, compliance and measures to minimize risks are required.
- Penalties: Violations of the EUDR can lead to significant fines and restrictions on market access.
The EUDR is relevant worldwide as it affects trading with the EU. Not only EU companies, but also suppliers from third countries must fulfill the requirements. This regulation also affects small and medium-sized companies that are part of larger supply chains, as they must also contribute to compliance.
Manufacturing companies that use raw materials from agriculture or forestry are faced with the challenge of comprehensively analyzing their supply chains and identifying potential deforestation risks.The EUDR requires precise data collection and the implementation of due diligence obligations, which requires additional processes and resources.Companies should set up mechanisms to review their supply chains at an early stage in order to avoid violations and potential penalties and ensure sustainable material sourcing.
