The EU Deforestation Regulation will introduce new due diligence and traceability requirements for businesses trading commodities and products associated with deforestation. With the regulation applying to large and medium operators* from 30 December 2026, businesses across the EU and Northern Ireland should use the remaining preparation period to strengthen their supply chain data, assess exposure and engage suppliers.
Key facts
- Aim: to ensure products placed on, made available in or exported from the EU market and Northern Ireland are not associated with deforestation or forest degradation. The UK is looking to introduce similar legislation (UK Forest Risk Commodity Regulation).
- Scope: cattle, cocoa, coffee, oil palm, rubber, soya and wood and a range of derived products.
- Timing: large and medium operators from 30 December 2026; micro and small operators from 30 June 2027. (Exception: operators covered by the EU Timber Regulation must comply from 30 December 2026.)
- Business action: collect supply chain information, undertake risk assessments and, where risks are identified, take appropriate mitigation action before products are placed on the market.
- Internal collaboration across procurement, sustainability, legal, compliance, commercial and data teams, as well as suppliers.
What is EUDR, and why does it matter for business?
With a growing population and rising living standards, global demand for agricultural commodities is one of the drivers of deforestation and forest degradation. The expansion of agricultural land is the primary cause while forestry supply chains also pose risks linked to forest degradation.
The EUDR aims to reduce the EU’s contribution to these impacts. It asks businesses to show that their products are deforestation-free and made in accordance with applicable legislation in the country of production. The European Commission describes this regulation as a means to transition to sustainable, deforestation-free value chains and help cut greenhouse gas emissions and biodiversity loss.
For businesses, this regulation elevates deforestation from an environmental or responsible-sourcing concern to a priority for market access, supply chain data and due diligence.
The regulation will affect organisations in different ways, depending on their role in the value chain, the products they trade and where those products come from. Companies across food and beverage, retail, hospitality and consumer goods like leather and footwear, packaging, furniture and construction may all have products or materials within scope. Financial institutions may also need to consider how the EUDR changes due diligence for their portfolios and investments.
Businesses therefore need to establish not only whether they use an EUDR commodity, but whether their specific products fall within the regulation and what responsibilities apply to them. At the heart of EUDR, businesses will need to demonstrate that relevant products:
- Are deforestation-free
Have been produced in accordance with relevant legislation in the country of production; and
are covered by the required due diligence documentation. Meeting these requirements will depend on tracing relevant commodities back to their place of production. Businesses will now have to collect geographical information relating to purchased commodities and share evidence that can be linked to individual products, suppliers and shipments
| Responsibility | First placer operator | Downstream operator | Trader (non-SME) | Trader (SME) |
| 1. Map relevant commodities, products and suppliers across operations | ✓ | ✓ | ✓ | ✓ |
| 2. Identify role and corresponding obligations within each supply chain | ✓ | ✓ | ✓ | ✓ |
| 3. Collect information on product type, quantity, country of production and supplier | ✓ | ✓ | ✓ | Limited, primarily obtain and retain information from suppliers |
| 4. Obtain geolocation data for plots of land where commodities were produced | ✓ | ✓ (where relying on own due diligence or transformed products) | Usually rely on upstream due diligence but must ensure availability | Generally retain/reference upstream information |
| 5. Assess risk of deforestation, forest degradation or legal non-compliance | ✓ | ✓ | ✓ | ✗ (non-SME) |
| 6. Address data gaps and mitigate non-negligible risks | ✓ | ✓ | ✓ | ✗ (non-SME) |
| 7. Maintain records and transmit information through the supply chain | ✓ | ✓ | ✓ | ✓ |
| 8. Submit a Due Diligence Statement (DDS) in the EU information system where required | ✓ | ✓ | ✓ (non-SME) | Generally reference upstream Due Diligence Statement rather than undertake full due diligence |
EUDR readiness is a wider supply chain opportunity
For a great many organisations, compliance will be the immediate motive. However, the information and relationships needed for EUDR compliance can also advance wider sustainability and commercial priorities, such as meeting the Land Sector Removals Standard and measuring removals where traceability allows. Among the key benefits are:
Better visibility of complex supply chains: Most businesses have good visibility of direct suppliers but less consistent information beyond this. EUDR preparation can highlight where commodity origin, producer, land-use and traceability information is incomplete or inconsistent, helping businesses understand dependencies within their supply chains and make better-informed procurement and risk-management decisions.
More effective supplier engagement: Supplier engagement should go beyond requesting data. A structured programme can help businesses build stronger, more collaborative relationships with suppliers by clarifying expectations, understanding their challenges and identifying where additional support is needed. Over time, these relationships can enable joint action to improve data, set reduction priorities and support suppliers in implementing decarbonisation initiatives.
Stronger land-use and emissions data: Land-use change can account for a large share of the environmental impact of agricultural products. Better information on origin, production systems and land-use history may help organisations review the quality of their emissions data and assumptions used in Scope 3 inventories. When stronger evidence becomes available, businesses can decide whether to update their land-use change calculations. Any changes should follow appropriate greenhouse gas accounting guidance and be backed by transparent, auditable evidence.
More credible climate transition planning: EUDR can also expose bigger, strategic questions that go beyond compliance. Specific climate risks and opportunities may become apparent to companies, making it easier to manage them. They might for example see if they depend on higher-risk sourcing regions, where alternative sourcing options exist; decide how supplier requirements should be reflected in procurement; and assess what investments are needed to improve traceability.
These considerations connect environmental ambition with operational delivery, governance, investment and value-chain influence. They can help businesses distinguish between actions they can implement directly, actions they can influence through suppliers and other value-chain partners, and the enabling mechanisms required to deliver change.
Six priorities for businesses
EUDR creates a clear compliance requirement, but its significance goes further. Businesses that act now will be better placed to identify data gaps, focus supplier engagement and reduce the risk of last-minute disruption. More importantly, they can use the same information to strengthen emissions accounting, responsible sourcing, nature action and climate transition planning.
The priority is not simply to collect more information. It is to build a traceability system that supports better decisions: where risk sits, which suppliers need support, and what action is needed to keep products moving through deforestation-free value chains.
1. Establish governance
Create a cross-functional working group with representation from procurement, sustainability, legal, compliance, data, commercial and relevant operational teams.
Clarify who is responsible for interpreting requirements, collecting evidence, engaging suppliers, reviewing risk assessments and approving information before submission. Senior ownership will be important where preparation requires changes to supplier contracts, purchasing processes or data systems.
2. Confirm your scope
Map the commodities and derived products that may fall within the regulation. Review customs codes and product classifications, and establish whether your organisation acts as an operator, downstream operator, trader or another relevant actor for each product flow.
Businesses should seek appropriate legal input where the applicability of the regulation or their obligations are uncertain.
3. Map products, suppliers and data flows
Develop a structured inventory of relevant products and connect each one to its suppliers, country of production and underlying commodity.
Map where information is held, how it moves between suppliers and internal teams, and whether it can be linked reliably to individual products or transactions. This should include an assessment of data completeness, consistency and ownership.
4. Engage suppliers early
Communicate requirements clearly and provide suppliers with proportionate, practical guidance. Supplier questionnaires can help create consistency, but they should be designed around the evidence actually needed and supported by clear definitions and instructions.
Consider segmenting suppliers according to commodity, geography, risk and readiness. This will help focus engagement and capacity-building resources where they are most needed.
5. Assess and mitigate risk
Aligned with the proposal: Establish a documented approach for evaluating supplier information and identifying risk. This should consider the factors required by the regulation, alongside the credibility, completeness and consistency of the evidence provided.
Where information is missing or a risk cannot be considered negligible, define what additional evidence, supplier engagement or sourcing action is needed. The Carbon Trust’s EUDR support approaches include reviewing information against regulatory requirements, identifying potential gaps, undertaking risk assessment and developing risk mitigation plans.
6. Connect compliance with wider sustainability action
Avoid treating EUDR as an isolated compliance exercise. Consider how improved traceability and supplier information can support Scope 3 accounting, land-use change assessment, nature strategies, supplier decarbonisation and climate transition plans.
Connecting these workstreams can reduce duplicated requests to suppliers and help turn regulatory investment into longer-term business value.
How we can help
Our support can be tailored to an organisation’s role, exposure and level of readiness, including:
- EUDR readiness and gap assessment: Identifying potentially relevant products, reviewing existing processes and assessing gaps in data, governance and supplier evidence.
- Supply chain and stakeholder mapping: Mapping affected commodities, products, internal teams, suppliers and other value-chain actors.
- Supplier engagement: Developing supplier questionnaires that are clear, proportionate and aligned with the evidence a business needs to collect. Supporting with supplier communication, guidance and engagement programmes to improve supplier understanding and data quality.
- Submission assessment frameworks and mitigation of risks: Creating practical checklists and decision criteria that internal teams can use to review supplier information consistently. Helping organisations identify higher-risk products, geographies and information gaps, and develop proportionate mitigation plans.
- Land-use change and greenhouse gas accounting: Assessing whether improved sourcing evidence has implications for emissions factors, land-use change calculations or Scope 3 reporting.
- Supply chain decarbonisation and transition planning: Using greater supply chain visibility to inform supplier programmes, decarbonisation priorities, governance and implementation planning.
Get in touch to discuss your EUDR readiness and connect compliance preparation with your wider supply chain and climate strategy.
*Medium-sized operator must not exceed two of the following thresholds and a large operator would exceed two of the three thresholds: €25 million balance-sheet total, €50 million net turnover and 250 average employees during the financial year
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