Delayed EUDR Regulations: Clearing the Forest of Paperwork

David Austin, business development manager at Customs Support considers the imminent introduction of the delayed EUDR regulations and why it shouldn’t mean a forest of additional paperwork for importers and exporters

The idiom ‘you can’t see the wood for the trees’ is befitting for businesses trading in seven critical commodities who must prove the products they move in and out of the European Union are ‘deforestation-free’ by December 30 this year.

This law was supposed to come into force from the end of December 2024, aimed at halting legal and illegal deforestation or practices that degrade our fragile habitats. However, it was delayed for an additional twelve months because of the burden of proof it could place on businesses.

The target of the measures are the enterprises directly trading in cattle, cocoa, coffee, palm oil, rubber, soy, wood and their derivatives, as well as the products made or fed with these commodities – including beef, leather, cosmetics, chocolate and furniture.

Given its breadth, it is no exaggeration to say that many larger industries will feel the additional regulatory impact, including diverse sectors from automotive to food, fashion, manufacturing and pharmaceuticals. It also impacts SMEs and micro-industries in the space where the new regulations will come into force later – from June 30, 2026 – to give them more time to adjust.

By December 30, each of these enterprises must have conducted due diligence on all their supply chain partners and provide evidence of their compliance with EUDR.

Why the regulation?

The reasons are existential. Over the past three decades, an area larger than the entire European Union has been deforested with whole swathes of the world stripped for commercial gain.

This has had a crushing impact on flora and fauna, contributing to the 69 per cent decline in wildlife populations in the last 50 years and the removal of carbon sinks, which help absorb carbon dioxide from the atmosphere.

The agriculture sector causes 80 percent of tropical deforestation from land clearance for crops and livestock to feed the world’s growing population which, according to the United Nations, will grow from 7.6 billion to 9.8 billion people by 2030.

Importantly, almost 4.2 billion people live within 5km of a forest and are dependent on them for their homes, livelihoods and sources of food. This is why stricter controls on preserving forested areas are being brought into force further ‘upstream’ – the countries where goods are consumed.

For example, palm oil alone is present in nearly 50 per cent of packaged products in the UK, from chocolate spread to soap. Most of the volume is sourced from Indonesia and Malaysia, tropical rainforest territories which represent 85 per cent of the global supply.

Under the new rules, companies will need to prove:

• The product itself, its ingredients or its derivatives are not produced on land that was deforested or degraded since December 31, 2020
• The commodities are produced in accordance with the laws in the country of production, including on human rights, and the rights of affected indigenous peoples have been respected

The UK

Despite Brexit, UK companies which are part of supply chains ultimately leading to EU markets will also be affected. EU importers may require UK suppliers to provide evidence of EUDR compliance, even if the UK company is not directly exporting to the EU.

This could involve more rigorous supplier vetting processes and investing in traceability systems. Some UK businesses are already ahead of the curve and looking to change suppliers to ones which can guarantee compliance.

Domestically, this is already required by the UK government which is mirroring the requirements of EUDR:

• UK businesses are prohibited from using illegally produced forest risk commodities, including both raw and derived products
• They must establish a due diligence system for each regulated commodity
• They must report annually on their due diligence

The impact

None of this is happening in a vacuum, and businesses are already recognising EUDR as a vital tool in ensuring a strong Environmental, Social and Governance (ESG) ranking.

As a company involved in every aspect of customs compliance, we have consulted many existing and potential clients on the nuance of the new regulation, from delivering transparent due diligence across the supply chain to the wholesale outsourcing of the EUDR process.

The reality is that no business can be complacent. To say EUDR’s bark is worse than its bite would be to downplay the severe sanctions for non-compliance, with financial penalties up to four per cent of annual turnover.  However, our experience of the current market is that businesses are far from complacent and are truly seeing the wood for the trees and their role in preserving them.