After being postponed twice, the EU Deforestation Regulation (EUDR) is expected to take effect on December 30, 2026. Companies that handle certain products derived from cattle, cocoa, coffee, oil palm, rubber, soy, or wood should therefore begin assessing now which obligations they must fulfill. This is because not every company in the supply chain has the same responsibilities. The specific product in question, the company’s role, and its position in the supply chain are particularly crucial.
For market participants that are micro and small enterprises and were established as such as of December 31, 2024, the EUDR generally does not apply until June 30, 2027. An exception applies to certain timber and timber products covered by the annex to the previous EU Timber Trade Regulation.
In this context, small or micro-enterprises are defined as enterprises that do not exceed two of the following three size criteria:
- Total assets: 5 million euros
- Net sales: 10 million euros
- Average of 50 employees
For certain products that were newly added to the scope of application in 2026, the EUDR regulations will not take effect until December 30, 2027.
Which raw materials and products are covered by the EUDR?
The EUDR covers seven commodity groups:
- Cattle
- Cocoa
- Coffee
- Oil palm
- Rubber
- Soy
- Wood
In addition, there are certain products manufactured from these materials. The specific products are listed in Annex I of the EUDR, which classifies goods by raw material group and Combined Nomenclature code number.
For relevant products that contain relevant raw materials, there is generally no de minimis threshold regarding the volume or value of the raw material contained therein.
A revised Annex I to the EUDR has been in effect since September 17, 2026. Among other things, the following have been newly added: extracts, essences, and concentrates derived from coffee; additional palm oil derivatives; and soap containing palm oil. The requirements for these newly added products take effect on December 30, 2027.
These raw materials and products are not covered by the EUDR
The new Annex I clarifies that items such as buffalo and bison, bamboo and rattan, as well as synthetic rubber, are not covered.
In addition, it excludes certain products from its scope of application. These include, under certain conditions:
- Product samples of low value and small quantity, as well as test and analysis samples
- Used or secondhand products in many areas of the rubber and wood categories
- Certain correspondence, marketing, and informational materials from the paper and cardboard category
Three Requirements for the Placing on the Market and Export of Relevant Products
According to the EUDR, a relevant product must meet three requirements:
- It must be deforestation-free. This means that the relevant raw materials must have been produced on land that was not deforested after December 31, 2020.
- It must have been produced in accordance with the applicable laws and regulations of the country of origin. These include, among other things, requirements regarding land use rights, environmental and occupational safety, human rights, as well as tax, anti-corruption, trade, and customs laws.
- A due diligence statement or simplified declaration in accordance with the EUDR must be available for the product.
Only under these conditions is a relevant product eligible for placement on the EU market.
The obligations under the EUDR depend on the company’s role
The specific obligations depend on the company’s role in the supply chain. The Deforestation Regulation distinguishes between market participants, micro- and small-scale primary producers, downstream market participants, and traders.
A company may also assume multiple roles in this context. For example, a company may be a market participant when importing a relevant raw material and a first downstream market participant when subsequently manufacturing and selling a new relevant product.
What are the obligations of market participants?
Market participants are subject to the most comprehensive due diligence obligations. The category of market participants includes anyone who, in the course of a commercial activity, makes a relevant product available on the Union market for the first time or exports it from the EU. According to the European Commission, an importer of relevant products is also considered a market participant.
Market participants have the following obligations:
Collecting and Retaining Information
You must collect the data, information, and documentation specified in Article 9 of the EUDR and retain them for at least five years. This includes, among other things, geolocation data for all parcels of land where the relevant raw materials were produced, and evidence of the products’ compliance with the law.
Assessing Risks
Based on the information gathered, market participants must determine whether there is a risk that the relevant products were not produced in a deforestation-free manner or in accordance with the applicable laws of the country of origin.
Reducing Risks
If the risk assessment indicates more than no risk or only a negligible risk, the market participant must take appropriate measures to mitigate the risk. These may include improving the information available, implementing internal risk management procedures, and establishing appropriate governance structures.
Establishing Risk Management and Internal Controls
Market participants must also establish appropriate policies, controls, and procedures to effectively mitigate and manage risks. Non-SME market participants must appoint a compliance officer at the executive level and establish responsibility for the independent review of internal policies, controls, and procedures.
Submit a due diligence declaration
The market participant may and must submit the due diligence declaration only if it has determined that there is no risk or only a negligible risk. The declaration is submitted via the European Commission’s IT information system (TRACES), where it is assigned a reference number. The market participant must provide this reference number to their downstream customer.
Simplified Requirements for Low-Risk Countries
If the relevant raw materials originate exclusively from countries classified as low-risk, simplified due diligence requirements apply. In such cases, only the information requirements apply; risk analysis and risk mitigation are significantly reduced. The European Commission determines which countries are considered low-risk as part of its country benchmarking process.
What are the obligations of micro- or small-scale primary producers?
Simplified requirements apply to micro or small primary producers if they are based in low-risk countries. They constitute a special group of market participants. This includes certain individuals as well as micro- or small enterprises in low-risk countries that place relevant products on the market or export them, provided they have grown, harvested, extracted, or raised those products themselves on the relevant properties.
Micro or small-scale primary producers may submit a one-time simplified declaration and receive an identification number in return. A separate due diligence declaration for each individual batch of relevant products is therefore not required. Under certain conditions, the geolocation information may be replaced by the mailing address of the properties.
What obligations apply to downstream market participants?
Downstream market participants must, above all, collect and retain certain information about their suppliers and customers.
A downstream market participant is defined as any person who places on the market or exports a relevant product that was manufactured from another relevant product for which a due diligence statement or simplified declaration has already been provided.
Example: A company purchases sawn timber that has already been placed on the market in the EU, falls under Annex I of the EUDR, and is accompanied by a due diligence statement. It uses this timber to manufacture wooden furniture, which is also listed in Annex I, and places it on the market. In doing so, the company acts as a downstream operator.
Downstream market participants must, in particular, collect and store information about the companies from which they receive the relevant products and to which they have, in turn, supplied them. This includes, in particular, names, addresses, and email addresses, as well as website addresses, if available. They must retain this information for at least five years.
An additional obligation applies to the first downstream market participant who receives a direct supply from a market participant: That participant must also record the reference number of the due diligence statement or the identification number of a simplified statement. However, that participant is not required to pass this number on further down the supply chain.
Non-SMEs must also register in the information system, even if they are not required to submit due diligence statements themselves.
In cases where there are indications or findings of potential nonconformity, the EUDR establishes additional testing and reporting requirements.
What are the obligations of traders?
The core obligations of traders with regard to information collection correspond to those of downstream market participants. For the purposes of the Deforestation Regulation, “traders” are defined as companies that make relevant products available on the Union market as part of their commercial activities without placing them on the market for the first time. Typically, this involves the resale of a relevant product that is already on the market.
In particular, retailers must collect data on their suppliers and customers and retain it for at least five years.
Here, too, the first retailer who is supplied directly by a market participant must also record the relevant reference or identification number.
Non-SME retailers must register in the information system. Furthermore, if there are indications of a lack of EUDR compliance, they are subject to information and verification requirements.
What applies to imports and exports?
For importers and exporters, customs procedures are relevant in addition to the substantive EUDR requirements.
As part of the customs declaration, the reference number of the due diligence statement or, if applicable, the identification number for micro or small primary producers, as well as the relevant customs tariff codes, must be provided.
The TARIC codes were updated in September 2026 to reflect the amended EUDR. Among other things, specific codes were newly introduced for
- the identification number of micro or small primary producers,
- certain products that, although assigned to a listed HS code, do not contain any relevant raw materials or products,
- used or secondhand products and recycled products, as well as
- product samples of low value and small quantity.
According to the European Commission’s FAQs, no new due diligence declaration is required when reimporting products that were previously made available on the EU market. However, the company must be able to prove the prior placing on the EU market by means of supporting documentation, such as invoices or delivery notes.
What are the potential consequences of violating the EUDR?
Among other things, the EUDR provides for fines of up to four percent of EU-wide turnover, the seizure of non-compliant products, the confiscation of profits, and exclusion from public procurement procedures.
Of particular relevance to companies is the following: Products that do not meet the requirements of the EUDR may not be placed on the EU market. They may not be placed on the market, made available on the market, or exported from the EU.
In Germany, an accompanying bill is also currently going through the legislative process. In addition to provisions for administrative fines, the bill also provides for criminal penalties under certain conditions. It also includes provisions regarding forfeiture, exclusion from procurement procedures and financial assistance, as well as temporary bans on placing products on the market.
Checklist: What Companies Should Review Now
For companies, the first step is to gain clarity on their specific use case. This is because the specific due diligence obligations depend, in particular, on the product in question, the company’s role, its size, and its position in the supply chain.
The requirements outlined above give rise to the following key points for review in particular:
- Do the company’s raw materials or products fall under the current Annex I of the EUDR?
- What role does the company play in the respective flows of goods?
- What information must be obtained and stored?
- Are upstream suppliers able to provide the required data and documentation in a timely and complete manner?
- Does the company itself need to issue a due diligence statement or store a reference or identification number?
- Are risk assessments and, if necessary, risk mitigation measures required?
- Are the necessary internal responsibilities and governance structures in place?
- Is registration in the information system required?
- For imports or exports, is the necessary information for the customs declaration available?
Companies that rely on the supply of relevant raw materials or products should also clarify with their suppliers at an early stage how the required information will be provided and how the EUDR requirements will be met. The lack of marketability of relevant products can also have operational implications for companies that are not themselves directly subject to the comprehensive due diligence obligations of a market participant.
