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EU Deforestation Regulation (EUDR) & Traceability Challenge
The European Union has long regulated the timber trade through the European Timber Regulation (EUTR, 2010/995/EU), which has been in place since 2013. The EUTR focuses on due diligence and documentary checks to prevent illegally harvested timber from entering the EU market. However, these mechanisms proved limited in scope, as they did not cover other deforestation-linked commodities or provide for strong traceability systems.
To address this gap, the European Deforestation Regulation (EUDR) was adopted in 2023 as part of the European Green Deal. The EUDR expands regulatory oversight beyond timber, covering a broader set of high-risk commodities and introducing mandatory geolocation traceability requirements. Its objective is to ensure that products consumed in the EU are both deforestation-free and legally produced, regardless of origin.
Unlike the EUTR, the EUDR adds a technological dimension to compliance. Companies must now provide precise geolocation data of production plots for all covered commodities, ensuring traceability from source to market. This marks a shift from documentation-based due diligence to a digital, verifiable traceability model.
Failure to comply could result in exclusion from the EU market and penalties of up to 4% of total EU turnover from the previous financial year.
Initially, large and medium-sized enterprises were required to comply by December 30, 2024, with small and micro-enterprises given until June 30, 2025. However, in December 2024, the Council of the EU formally adopted a one-year postponement. The new deadlines are now;
While the postponement provides additional time, early action is strongly advised. Implementing traceability systems and supplier engagement programs is complex, particularly for companies sourcing from fragmented, smallholder-based supply chains.
The EUDR imposes stringent supply chain due diligence (DD) and reporting requirements on certain commodities and products imported into, traded within and exported out of the EU.
The EUDR targets commodities most associated with deforestation and forest degradation. Commodities and products include cattle, cocoa, coffee, palm oil, rubber, soy, wood, as well as certain related products such as leather, chocolate, certain furniture, tires, paper or natural rubber spare parts (non-exhaustive list).
All such commodities placed on the EU market or exported from the EU must have been produced after December 31, 2020, on land not subject to deforestation.
The centerpiece of the EUDR is its traceability mandate:
Commodities must be produced legally and deforestation-free. Traceability to the ‘plot of land’ is necessary to demonstrate that there is no deforestation occurring at a specific location. The Regulation requires that Operators collect and provide in the due diligence statement geographic coordinates of the plots of land where the commodities were produced or harvested, which must then be submitted to the Information System. Products that do not meet the traceability requirements may not be placed on the EU market or exported.
Traceability requirements apply to each batch of imported, exported or traded commodities. It must demonstrate that commodities are deforestation-free and legally produced before they can be placed on the EU market.
Non-compliance with the EUDR can lead to:
These penalties highlight the importance of building robust compliance infrastructure and ensuring full visibility across supply chains.
The aviation catering and packaging sector faces unique challenges under the EUDR. The complexity of supply chains in this industry, involving multiple suppliers, intermediaries, and packaging components, makes traceability particularly difficult. Additionally, packaging materials themselves must now be deforestation-free, which requires careful supplier management and material verification. Companies in this sector are encouraged to enhance transparency, implement digital tracking systems, and actively collaborate with suppliers to ensure all materials comply with EUDR standards.
Businesses preparing for compliance should:
By acting early, companies can mitigate compliance risks, safeguard EU market access, and position themselves as leaders in sustainable sourcing.
The EU Deforestation Regulation represents a major shift in how commodities are traded and monitored. By embedding geographic traceability into due diligence, the EUDR strengthens the EU’s role as a global leader in sustainable supply chain governance.
However, its success will depend on how effectively companies and their upstream suppliers, particularly smallholders adapt to the new requirements. With penalties high and deadlines approaching, proactive compliance is no longer optional but essential.
