EUDR Compliance: What Your Business Needs to Know

Introduction to the EU Deforestation Regulation (EUDR)

The EU Deforestation Regulation (EUDR) represents a landmark effort by the European Union to address global deforestation and forest degradation. With deforestation contributing significantly to climate change, biodiversity loss, and habitat destruction, the EUDR is a critical tool in promoting sustainability and environmental stewardship. Effective from December 2025 for large businesses and June 2026 for small and medium enterprises (SMEs), the regulation applies not only to EU-based companies but also to businesses worldwide that trade with the EU. For businesses, EUDR compliance is more than a regulatory requirement; it’s an opportunity to demonstrate commitment to transparency, responsible sourcing, and sustainability.

At 4 Pack, we specialise in helping businesses navigate the complexities of EUDR compliance, particularly in packaging and production, ensuring you stay ahead of regulatory demands while enhancing your supply chain resilience.

In this article, we’ll cover:

• The key provisions of EUDR and the commodities it applies to.
• The due diligence requirements and their impact on supply chains.
• How to prepare for EUDR compliance and mitigate risks.
• Penalties for non-compliance and why acting now is critical.
• Why partnering with 4 Pack is your best strategy for seamless compliance.

Understanding the Key Provisions of EUDR

The EU Deforestation Regulation (EUDR) is a landmark policy with the purpose of addressing the global crisis of deforestation and forest degradation. It aims to ensure that commodities and products associated with these environmentally harmful practices are not placed on or exported from the EU market. By replacing the narrower EU Timber Regulation (EUTR), the EUDR broadens its scope to encompass a wider range of commodities and derived products. This expansion is critical in combating the environmental, social, and economic impacts of deforestation.

The Seven Commodities Covered by EUDR

The regulation identifies seven core commodities and their derivative products that are closely linked to deforestation. Each of these has far-reaching implications for industries across the globe:

1. Cattle:

• Includes beef, leather, and related derivatives.
• Cattle farming is a major driver of deforestation. This is particularly true in regions like South America, where forests are cleared for grazing land or soybean feed production.
• The regulation requires comprehensive traceability, ensuring cattle products are not sourced from deforested lands.

2. Cocoa:

• Covers chocolate, cocoa butter, and other food products containing cocoa.
• The cocoa industry has historically had a link to deforestation in West Africa, where forested land has been cleared for plantations.
• Businesses must demonstrate that cocoa is grown on land free from deforestation post-2020.

3. Coffee:

• Applies to roasted, unroasted, and substitute coffee products.
• Coffee production, particularly in tropical regions, has led to forest clearing for farming.
• Companies must ensure coffee is cultivated in a manner that complies with EUDR standards and respects local environmental laws.

4. Palm Oil:

• Includes palm oil used in foods, cosmetics, and glycerol derivatives.
• With palm oil present in nearly half of packaged products globally, its production has been a significant contributor to deforestation in Indonesia, Malaysia, and parts of Africa.
• The EUDR demands stringent documentation to verify that palm oil is sourced from deforestation-free plantations.

5. Rubber:

• Covers natural rubber, tires, and other related products.
• Rubber plantations have increasingly encroached on tropical forests, particularly in Southeast Asia.
• The regulation requires producers and traders to provide geolocation data to verify rubber sources.

6. Soy:

• Includes soybeans, soybean oil, and other derivatives.
• Soy cultivation has been a leading cause of deforestation in regions like the Amazon, as forests are cleared to meet global demand.
• Businesses must ensure that soy products comply with EUDR’s deforestation-free criteria.

7. Wood:

• Encompasses timber, paper, furniture, printed materials, and other wood-derived products.
• Wood products have long been regulated under the EUTR, but the EUDR extends its scope to address both legal and illegal deforestation.
• Companies must ensure that wood is harvested sustainably, with no forest degradation after December 2020.

Core Compliance Criteria of EUDR

To meet the requirements of the EUDR, businesses must ensure that their products comply with the following three key criteria:

1. Deforestation-Free:

• The EUDR defines “deforestation-free” as commodities and products that have not been sourced from land converted from forest to agricultural or other use after December 31, 2020.
• This includes addressing legal deforestation. This is where land conversion is permitted under the laws of the country of origin, but still contributes to environmental harm.

2. Produced in Accordance with Local Laws:

• The regulation mandates compliance with the legal framework of the production country. This includes:
  • Land-use rights and environmental protections.
  • Forest management and biodiversity conservation.
  • Labour rights and human rights, including the rights of indigenous peoples.
  • Tax, anti-corruption, trade, and customs regulations.
• Businesses must verify that products adhere to these legal standards to be eligible for the EU market.

3. Due Diligence Statement:

• Companies must prepare and submit a due diligence statement confirming that their products are compliant with the EUDR.
• This statement must include:
  • Geolocation data of the production site.
  • Information about the product, such as composition and quantity.
  • Verification that the risk of deforestation or forest degradation is negligible.
• The European Commission will establish an online database where these statements must be uploaded and made accessible to national authorities for monitoring.

Why These Provisions Matter

The EUDR’s comprehensive approach addresses both direct and indirect causes of deforestation, setting a high standard for global trade. By requiring detailed traceability, risk assessment, and compliance declarations, the regulation ensures accountability across entire supply chains. Businesses that align with EUDR standards not only gain access to the lucrative EU market but also enhance their reputation as sustainability leaders.

At 4 Pack, we are experts in helping businesses meet these complex requirements, particularly in the packaging and production sectors.

From supply chain mapping to due diligence preparation, we provide tailored solutions to ensure your compliance with EUDR’s strict provisions. Partner with us to navigate these regulations confidently and contribute to a sustainable future.

Due Diligence Requirements for EUDR

Compliance with the EU Deforestation Regulation (EUDR) is heavily reliant on the implementation of comprehensive and transparent due diligence processes. These requirements are to ensure businesses can verify that their supply chains are free from deforestation and forest degradation. The due diligence framework outlined by the EUDR is not just a regulatory formality but a robust system to promote environmental accountability and sustainability in global trade.

1. Information Collection: Gathering Detailed Supply Chain Data

The cornerstone of EUDR compliance is the ability to provide in-depth and accurate information about the products and commodities being placed on or exported from the EU market. This includes:

• Geolocation of Production Areas:
  • Businesses must identify the precise geographic coordinates of the land where the commodities were produced.
  • This geolocation data is critical for verifying whether the production areas align with EUDR’s deforestation-free criteria. This ensures the land has not been converted from forests after December 31, 2020.
  • Geospatial tools and technologies, such as satellite imagery and GIS mapping, are often used to collect and validate this data.
• Product Composition and Origin:
  • Companies must provide an in-depth breakdown of their product’s composition, specifying which raw materials they use and their origins.
  • This ensures traceability and transparency throughout the supply chain, from raw material extraction to the final product.
• Compliance with Local Laws:
  • Businesses must confirm that the production processes comply with local environmental, labor, tax, and human rights laws.
  • This includes ensuring that the rights of indigenous peoples and local communities have been respected and that workers’ rights are upheld.

2. Risk Assessment: Evaluating Supply Chain Risks

After gathering the necessary information, businesses must conduct a comprehensive risk assessment to evaluate the likelihood of non-compliance with EUDR requirements. This involves:

• Assessing Deforestation Prevalence:
  • Businesses must evaluate the prevalence of deforestation and forest degradation in the country or region where their commodities are sourced.
  • Countries may be classified as high-risk, standard-risk, or low-risk based on deforestation trends, environmental governance, and transparency.
• Analyzing Supply Chain Complexity:
  • Multi-tiered supply chains increase the risk of non-compliance, as traceability becomes more challenging with multiple intermediaries and processes.
  • Companies must ensure visibility across every level of their supply chain, identifying potential weak points or areas of concern.
• Identifying Illegal Practices:
  • Businesses must evaluate the likelihood of illegal practices, such as illegal logging, land-use violations, or corruption, in sourcing regions.
  • This requires collaboration with local authorities, NGOs, and industry bodies to gather reliable information.

3. Risk Mitigation: Addressing Identified Risks

When risks are identified during the assessment process, businesses are obligated to take proactive measures to mitigate them. Risk mitigation strategies include:

• Independent Audits:
  • Conducting third-party audits of suppliers and production processes ensures that compliance with EUDR standards is independently verified.
  • These audits should include on-site inspections, document reviews, and geospatial data analysis.
• Supplier Engagement and Capacity Building:
  • Businesses must work closely with their suppliers to address gaps in compliance and build their capacity to meet EUDR requirements.
  • This includes providing training on sustainable sourcing practices, improving supply chain traceability, and implementing corrective actions where necessary.
• Transitioning to Sustainable Sourcing:
  • Companies must prioritize sourcing from regions or suppliers that demonstrate a commitment to sustainable practices and compliance with EUDR standards.
  • Certification schemes, such as FSC or RSPO, can play a vital role in validating the sustainability of raw materials.

4. Due Diligence Statement: Declaring Compliance

A critical component of EUDR compliance is the submission of a Due Diligence Statement. This declaration is a formal certification that confirms the product complies with EUDR requirements.

Key aspects of the due diligence statement include:

• Submission to the European Commission Database:
  • Businesses must upload the due diligence statement to a centralised database managed by the European Commission.
  • This ensures transparency and enables regulatory authorities to monitor compliance across the EU market.
• Verification of Compliance:
  • The statement must detail the steps taken to ensure compliance, including geolocation data, risk assessments, and mitigation measures.
  • It certifies that the product poses no more than a negligible risk of there being a link to deforestation or forest degradation.
• Accessibility for Stakeholders:
  • Due diligence statements are accessible to national authorities, relevant traders, and, to some extent, the public.
  • This transparency builds trust among consumers and stakeholders, reinforcing the business’s commitment to sustainability.

Why Robust Due Diligence Matters

Implementing robust due diligence practices not only ensures regulatory compliance but also strengthens supply chain resilience and enhances brand reputation. By addressing potential risks and demonstrating a commitment to sustainable sourcing, businesses can:

• Avoid hefty fines, reputational damage, and import bans resulting from non-compliance.
• Build stronger relationships with environmentally conscious consumers and partners.
• Position themselves as leaders in sustainability and environmental stewardship.

At 4 Pack, we specialise in helping businesses navigate the complexities of EUDR compliance.

From supply chain mapping and risk assessments to preparing due diligence statements, our tailored solutions ensure your business meets the regulation’s stringent requirements. Partner with us to stay ahead of regulatory demands and lead the way in sustainable practices.

Impact on Supply Chains

The EUDR places significant emphasis on supply chain transparency, requiring businesses to trace their products back to their origins. For many, this presents challenges:

• Granular Data Collection: Geolocation data for production sites is mandatory, even for small suppliers. This level of detail is often difficult to obtain in complex supply chains.
• Supplier Engagement: Businesses must work closely with suppliers to ensure compliance, particularly in high-risk regions.
• Technological Investment: Tools like blockchain, geospatial analysis, and advanced tracking systems are essential for managing compliance.

However, these challenges come with opportunities. Businesses that embrace the EUDR can strengthen their supply chains, reduce risk, and position themselves as leaders in sustainability.

Preparing for EUDR Compliance

To ensure compliance by the 2025 deadline, businesses should start preparing now. Here’s a step-by-step guide:

1. Map Your Supply Chains
   • Identify all suppliers involved in producing the commodities and products you trade.
   • Engage suppliers to gather data on production practices and geolocation.
2. Assess Risks
   • Use available tools, such as the EU’s risk assessment frameworks, to evaluate high-risk suppliers or regions.
   • Focus on areas with high deforestation rates or weak regulatory enforcement.
3. Invest in Technology
   • Implement digital tools like blockchain to track product origins.
   • Leverage geospatial analysis to verify production locations.
4. Engage with Suppliers
   • Provide training and resources to help suppliers transition to deforestation-free practices.
   • Conduct regular audits and verifications.
5. Develop a Due Diligence Process
   • Establish a system for preparing and submitting due diligence statements.
   • Document compliance efforts and maintain records for at least five years.
6. Collaborate with Experts
   • Work with compliance solution specialists, like 4 Pack, to streamline your processes and ensure you meet all EUDR requirements.

Penalties for Non-Compliance

Failing to comply with the EUDR carries significant consequences, including:

• Financial Penalties: Fines up to 4% of annual EU turnover.
• Market Access Restrictions: Non-compliant products may face confiscation, and businesses could face bans from operating in the EU.
• Reputational Damage: Consumers and stakeholders expect transparency, and non-compliance can harm your brand’s sustainability credentials.

By acting now, businesses can avoid these risks and turn compliance into a competitive advantage.

Opportunities Beyond Compliance

EUDR compliance offers more than just regulatory alignment.

Businesses that meet its standards can:

• Enhance Sustainability Credentials: Showcase your commitment to environmental responsibility.
• Strengthen Supply Chains: Build resilience and transparency into your operations.
• Attract Eco-Conscious Consumers: Capture the growing market of environmentally aware buyers.

How 4 Pack Can Support Your EUDR Compliance Journey

At 4 Pack, we understand the complexities of EUDR compliance and offer tailored solutions to help businesses meet these demands. From supply chain mapping to due diligence reporting, we provide comprehensive support for packaging and production businesses.

Our services include:

• Advanced supply chain tracking systems.
• Risk assessment frameworks.
• Supplier engagement strategies.
• Preparation and submission of due diligence statements.

With our expertise, you can navigate EUDR requirements with confidence, ensuring your products meet the highest standards of sustainability and compliance.

Conclusion: Act Now to Secure Your Future

EUDR compliance represents a significant shift in how businesses approach their supply chains. By aligning with its stringent requirements, companies can protect the environment, enhance their market position, and meet the growing demand for sustainable products.

Don’t wait until the deadline—start preparing today. Contact 4 Pack to learn how we can help you achieve seamless EUDR compliance and secure your business’s future in a sustainable, deforestation-free market. Let us be your partner in navigating this regulatory challenge and turning it into an opportunity for growth.