Overview

The EU Deforestation Regulation, Regulation (EU) 2023/1115 on Deforestation-free Products, referred to as EUDR, is a core policy of the "European Green Deal" for addressing climate change and protecting biodiversity.

The EUDR aims to reduce the risk of products linked to deforestation or forest degradation entering or exporting the EU market. Simultaneously, it seeks to stimulate the demand for and trade in legal and "deforestation-free" commodities within the EU. This initiative is designed to curb global forest destruction and regulate supply chain sustainability, thereby lowering greenhouse gas emissions, stemming biodiversity loss, and fostering the green transition of global supply chains.

According to the regulation, any operator or trader placing regulated commodities and their derived products on the EU market or exporting them from the EU must demonstrate that their product's production has not caused deforestation or forest degradation and is legally compliant.

EUDR Regulated Products

The publication of the EUDR replaces the former EU Timber Regulation (EUTR). Building upon the EUTR's control over timber, the EUDR's scope has been expanded to cover seven major categories of commodities: cattle, coffee, cocoa, oil palm, soya, wood, and rubber, along with their related derived products (e.g., chocolate, tires, and stearic acid,). 

Annex I of the regulation lists the names of controlled commodities (including derived products) and their corresponding HS codes, facilitating precise regulation.

It should be noted that products not listed in Annex I of the regulation are not subject to control, even if they contain regulated commodities. For example, soap, which contains palm oil (a regulated commodity), is not regulated by EUDR because soap itself is not listed in Annex I.

Regulated Entities

Enterprises in the EU that produce, import, export, or sell these regulated commodities and their derived products must comply with the EU law on deforestation-free products, involving three key roles:

Directly Regulated by EUDR: EU-based Enterprises

EUDR directly regulates entities within the EU that engage in the production, import, export, and sale of regulated goods (and their derivatives). These mainly include two types of roles, each bearing clear compliance obligations:

Producers/Importers/Exporters: The “first line of defense” for market access

These entities refer to enterprises within the EU that first place regulated goods on the EU market (e.g., EU-based producers, importers bringing goods from third countries) or first export goods from the EU to other regions. They are legally defined as “Operators.” Examples include:

• EU importers importing palm oil from Indonesia for food processing;

• Producers processing oil palm into stearic acid (a chemical raw material) in Belgian;

• EU exporters exporting EU-produced rubber tires to South America markets.

Their core responsibilities are:

• Ensuring that goods entering or leaving the EU market meet “deforestation-free” and legal production requirements;

• Leading the completion of full-chain due diligence for products, generating and submitting Due Diligence Statements (DDS);

• As the responsible entity at the supply chain entry point, assuming primary verification obligations for product compliance.

Distributors/Traders: “Compliance guardians” in supply chain circulation

EUDR directly regulates enterprises engaged in secondary and subsequent transactions within the EU supply chain after goods are placed on the EU market by producers/importers. They are legally defined as “Traders.” Examples include:

• Trading companies purchasing coffee beans from French importers and distributing them to chain coffee shops across the EU;

• Regional distributors bulk-purchasing rubber raw materials produced in Germany and supplying them to tire factories in Italy;

• Chemical traders reselling stearic acid (derived from palm oil) to cosmetic factories in Spain.

Their core responsibilities focus on:

• Verifying whether upstream products have undergone due diligence and confirming the compliance of circulating goods;

• Properly retaining supply chain traceability information to ensure the traceability of goods circulating within the EU;

• Transmitting compliance information to downstream links (e.g., DDS numbers and related certificates) to form a closed loop of supply chain compliance.

Indirectly Regulated by EUDR: Non-EU Suppliers

Although EUDR’s direct scope of application is limited to EU-based enterprises, due to the rigid requirements for supply chain traceability, non-EU suppliers (e.g., Chinese chemical and food enterprises exporting regulated goods to the EU) are “indirectly regulated entities” and must assume necessary cooperative responsibilities. To fulfill their own compliance obligations, EU-based producers/importers will extend the burden of proof for due diligence upstream, requiring non-EU suppliers to provide relevant information.

Examples:

(1) When a Chinese chemical enterprise exports stearic acid (made from palm oil) to the EU, EU importers will require it to provide “deforestation-free” and “legally produced” certificates for the origin of the palm oil (including environmental approval documents for the production process, etc.);
(2) Chinese exporters of raw coffee beans need to submit “deforestation-free” and “legally produced” certificates for coffee plantations to EU customers (including local labor compliance records, etc.). 

If non-EU suppliers fail to meet the above requirements, EU-based enterprises will be unable to complete the EUDR compliance verification, forced to terminate cooperation, and ultimately result in the loss of EU market access for the goods.

Authorized Representatives: “Supporting Executors” in Compliance Processes

EU-based producers/importers and distributors may appoint natural persons or legal entities within the EU in writing as authorized representatives to assist in completing compliance matters. According to the regulation, the core function of authorized representatives is technical support, mainly including submitting Due Diligence Statements (DDS) on their behalf in official systems.

It should be clarified that authorized representatives are not regulated by EUDR and do not bear the ultimate responsibility for product compliance; the relevant responsibilities remain with the entrusting EU-based enterprises. 

REACH24H’s Irish subsidiary, with professional qualifications and localized service capabilities, can assist EU-based enterprises in effectively reducing operational risks in compliance processes and accelerating compliance progress.

Compliance Requirements of the EU Regulation on Deforestation-Free Products

According to Article 3, products must meet three conditions to enter or export the EU market.

• Deforestation-free: The land used for the product has not been subject to deforestation or forest degradation after December 31, 2020;

• Legally produced: They have been produced under the relevant legislation of the country of production, including land use rights, environmental protection, labor rights, and human rights (especially the free, prior, and informed consent rights of indigenous peoples);

• Complete due diligence statement: one must gather information, assess risks, and ensure products are 'deforestation-free' and 'legally produced.' Subsequently, an official 'Due Diligence Statement (DDS)' must be submitted online through the EU information system. This statement requires core data, including activity type, company information, product details, and Geolocation coordinates of origin.

Our Services

• EUDR Regulation Consulting

• EUDR Regulation Training

• EUDR Registration Application

• EUDR Product Traceability and Supply Chain Due Diligence

• EUDR Authorized Representative

• EUDR Risk Assessment

• FSC Forest Certification Consulting/Guidance

If you have any questions in this regard, please feel free to contact us at customer@reach24h.com.