Regulation (EU) 2023/1115 on deforestation-free supply chains (EUDR) aims to curb deforestation and forest degradation worldwide. It applies to products derived from seven animal and plant-based raw materials: cattle, cocoa, coffee, oil palm, rubber, soya and wood – as well as a wide range of downstream products that contain these raw materials or for which the raw materials have been used in the production or as feed.

These include, for example, meat, leather, chocolate, roasted coffee, tyres, seals, soya oil and soya meal, wood-based materials and paper. The exact scope is set out in Annex I to the now amended Regulation.

The Regulation has been in force since June 2023 and will apply – depending on company size and sector – on a phased basis starting in late 2026 or mid-2027, respectively.

Companies should use the remaining transition period to take the necessary steps to comply with the new due diligence obligations. This is because, in the event of non-compliance with the Regulation, the products concerned may neither be placed on the market within the EU nor exported from it – resulting in significant disruptions to existing supply chains.

The following article analyses the key elements of the package and their practical implications for operators in the affected sectors.

Background: The original EU Deforestation Regulation

The EU Deforestation Regulation (EUDR) is designed to ensure that goods placed on the market in the EU do not contribute to deforestation or forest degradation, either within the European Union (EU) or globally – two of the most significant drivers of climate change and biodiversity loss.

The main cause of deforestation is the expansion of agricultural land in connection with the production of commodities covered by the Regulation, as well as some of their derived products.

Under the Regulation, any operator or trader placing such commodities on the EU market or exporting them from the EU must be able to demonstrate that the products do not originate from recently deforested areas or have contributed to forest degradation.

Amendments by Regulation (EU) 2025/2650

In December 2025, the European Parliament and the Council adopted a revised text to ensure the legal certainty required for successful implementation, whilst reducing the resulting administrative burden and the strain on affected businesses.

Regulation (EU) 2025/2650, amending Regulation (EU) 2023/1115 regarding certain obligations of operators and traders, has once again postponed the implementation deadlines for the EUDR by one year to the end of 2026. In addition, key definitions have been clarified, and the due diligence obligations have been revised. 

Revision by the European Commission and further measures

On 4 May 2026, the European Commission presented a comprehensive implementation package for the revised EUDR (press release available here), which comprises a simplification report to the European Parliament and the Council, updated guidance together with FAQs, a draft delegated act on the scope of products – the adoption of which by the Commission is still pending at the time of writing this legal update – and a revised implementing act on the EUDR information system, which is currently before the Member States for adoption. The package responds to the revised text of the Regulation adopted in December 2025 and establishes the regulatory framework for its forthcoming entry into force.

Central to compliance practice is the announced cost reduction: the measures are intended to reduce annual compliance costs by around 75 per cent compared with the original EUDR. In addition, the package contains further relief measures for micro and small undertakings, as well as, for the first time, clarifications on e-commerce scenarios and geolocation arrangements.

The content of the EUDR

Affected companies

In principle, the EUDR applies to all companies involved in the supply chains of the covered commodities and products. However, the specific implications of the Regulation vary considerably depending on the position and function of the respective company within the supply chain.

In its current version, the EUDR distinguishes between three types of companies subject to direct obligations, each of which is subject to different obligations depending on their size: ‘operators, ‘downstream operators’ and ‘traders’.

Operators

An ‘operator’ within the meaning of the EUDR is any natural or legal person who, in the course of a commercial activity, places relevant products on the Union market or exports them, without being a so-called ‘downstream operator’.

The Regulation further distinguishes between medium-sized and large undertakings on the one hand, and micro and small undertakings on the other, based on the size of the operators. For the purposes of categorisation, the EUDR refers to the criteria set out in Directive 2013/34/EU. 

Accordingly, micro and small undertakings are defined as enterprises which, on the balance sheet date, do not exceed the thresholds for at least two of the following size criteria:

• a balance sheet total of EUR 450,000 or EUR 5,000,000;
• net turnover of EUR 900,000 or EUR 10,000,000;
• an average of 10 or 50 employees during the financial year.

Downstream operators

A ‘downstream operator’ within the meaning of the EUDR is any natural or legal person who, in the course of a commercial activity, places on the Union market or exports relevant products made using relevant products, all of which are covered by a due diligence statement or by a simplified declaration in accordance to Article 4a of the EUDR. The latter applies to so-called micro-producers and small primary operators.

The Regulation also makes further distinctions within the downstream supply chain based on the size of the undertakings concerned. A distinction is made between micro enterprises, small and medium-sized enterprises (SMEs) on the one hand, and large enterprises (non-SMEs) on the other.

Non-SMEs are those which, on the balance sheet date, exceed at least two of the following size criteria:

• a balance sheet total of EUR 25,000,000;
• a net turnover of EUR 50,000,000;
• an average of 250 employees during the financial year.

Obligations for operators

Under Article 3 of the EUDR, operators may only place on the market, make available on the market or export the commodities and products covered by the Regulation if they are (a) deforestation-free, (b) produced in accordance with the relevant legislation of the country of production, and (c) covered by a due diligence statement submitted to the competent national authority.

‘Deforestation-free’ means that the products do not contain raw materials, were not fed with such materials, or were not manufactured using materials that were produced on land that was deforested after December 31, 2020.

The relevant legislation of the country of production to be observed includes land use rights, environmental protection and forest-related rules, third parties’ rights, labour rights, human rights protected under international law, the principle of free, prior and informed consent, as well as tax, anti-corruption, trade and customs regulations.

In the due diligence statement to be submitted, the companies concerned must certify their compliance with the due diligence obligations imposed on them by Article 8 of the EUDR. This initially comprises the obligation to gather all information, data and documentation necessary to demonstrate that the products are free from deforestation and comply with the legislation of the country of production. In particular, it is necessary to list the commodities contained in the products in question, specify the quantity of the products, identify the producer countries, provide the geolocation of all plots of land on which the relevant commodities were produced or held, specify the date or time range of production, and list all suppliers and recipients of the products. On the basis of this information, operators must then carry out their own risk assessment and repeat this regularly. If the assessment indicates a non-negligible risk of a breach of Article 3 of the EUDR, the measures necessary to mitigate the risk must be taken.

Compliance with the aforementioned requirements must be comprehensively documented. The relevant documentation, as well as the due diligence statement, must then be retained for a period of five years and made available to the competent authority upon request.

Furthermore, operators must help to ensure that the EUDR compliance of the products in question is maintained throughout the downstream supply chain. To this end, they must, in particular, provide downstream operators with the reference number of the submitted due diligence statement. If, after the products have been placed on the market or exported, circumstances come to light that indicate a possible non-compliance of the products in question with the requirements of the EUDR, both the competent authority and the relevant operators in the downstream supply chain must be informed of this without delay.

Operators are also obliged to report annually, in a publicly accessible and comprehensive manner, on their own compliance with due diligence obligations. The report must set out the information gathered, the results of the risk assessment and any risk mitigation measures taken.

Relief measures for micro and small undertakings

The EUDR now provides for relief measures for a specific sub-category of small operators – so-called micro and small primary operators (Article 4a EUDR). These are operators who are natural persons, micro-undertakings or small undertakings established in a country classified as low-risk, and which, in the course of a commercial activity, places on the market or exports relevant products that this operators themselves have grown, harvested, obtained from or raised on relevant plots of land, or, as regards cattle, on establishments located in that country.  These simplifications therefore do not apply to small undertakings that merely trade in or process products without producing them themselves.

Instead of a comprehensive due diligence statement, Article 4a of the EUDR stipulates that a simplified declaration in accordance with the requirements of Annex III to the Regulation is sufficient. 

Nor is there any requirement to publish a report on compliance with due diligence obligations.

Otherwise, however, the list of obligations corresponds to that for medium-sized and large enterprises.

Obligations for downstream operators

Downstream operators must also ensure compliance with the requirements of Article 3 of the EUDR. However, the obligations imposed on them in this regard differ significantly from the obligations of operators outlined above.

Companies in the downstream supply chain must always register in the information system provided for in Article 33 of the EUDR before placing or making available relevant products on the market or exporting them.

Furthermore, they must notify the competent authority without delay should circumstances subsequently come to light that indicate a possible non-compliance of the products supplied with Article 3 of the EUDR. Where there are substantiated concerns as to the EUDR compliance of the products in question, large undertakings – but not SMEs – are additionally obliged to verify that the operator has properly fulfilled its due diligence obligations under Article 8 of the EUDR. 

Regardless of their size, downstream operators must also document all information necessary to ensure the traceability of the supply chain. In particular, they must record the identity of their suppliers and customers, including their respective contact details and – where available – web addresses, and keep this information for a period of at least five years. If the supplier is an operator, the reference numbers of the relevant due diligence statements or, in the case of a simplified declaration under Article 4a of the EUDR, the relevant identification numbers must also be documented.

Traders

Traders within the meaning of the EUDR are all persons in the supply chain other than the operators who, in the course of a commercial activity, make relevant products available on the market . 

Their obligations are set out in Article 5 of the EUDR and are significantly less onerous than those applicable to operators. The core element is a documentation requirement to ensure supply chain transparency: 

Traders must record the identity and contact details of their suppliers and customers – including any available web addresses – and keep this information for at least five years. The additional obligation to record the reference numbers of the relevant due diligence statements or the identification numbers of a simplified declaration under Article 4a of the EUDR applies only to the first trader in the supply chain; subsequent traders are no longer obliged to do so. 

Nevertheless, traders must notify the competent authority without delay if they subsequently become aware of circumstances indicating a possible non-compliance of supplied products with Article 3 of the EUDR. 

For non-SME traders, there is also an additional obligation to register in the information system provided for under Article 33 of the EUDR and – in the event of substantial concern of non-compliance – an obligation to verify that the upstream operator has properly fulfilled their due diligence obligations before making the products in question available.

Indirectly affected companies

However, it is also worth looking beyond the text of the Regulation. This is because the EUDR also indirectly affects companies that have contractual relationships with the aforementioned operators subject to direct obligations, downstream operators or traders, without themselves falling into any of these categories.

These include, in particular, producers and upstream suppliers – such as commodity producers in third countries or upstream service providers – who do not place relevant products within the meaning of the EUDR on the Union market or export them and are therefore not themselves subject to the obligation of the Regulation. As operators, downstream operators and traders regularly rely on the provision of information – in particular geolocation data and evidence of deforestation-free status – by these upstream actors in order to fulfil their due diligence obligations, appropriate contractual clauses will need to ensure their cooperation, thereby effectively establishing an indirect obligation under the EUDR. 

It should be noted that the regulatory relief provided for traders – for example regarding the simplified declarations or reporting obligations – relates exclusively to their own obligations imposed directly by the EUDR. It does not release traders from the contractual obligations they have undertaken or must undertake towards other operators in the supply chain in order to ensure their compliance.

Penalties

In the event of infringements, Article 25 of the EUDR sets out a list of possible penalties. These include fines (calculated on the basis of the environmental damage caused and the value of the goods), the confiscation of the relevant products and any revenue gained from them, and temporary exclusion from public procurement processes and from access to public funding. In the case of serious or repeated infringements, there is also the risk of a temporary prohibition of placing the products on the market.

In addition to these penalties under public law, there is a significant potential for civil liability given the likely contractual arrangements within the supply chain.

Deadlines

The key implementation deadlines for the EUDR are staggered: for large and medium-sized undertakings, as well as for micro and small undertakings in the timber sector, the Regulation applies from 30 December 2026. For other micro and small undertakings, the EUDR applies from 30 June 2027.

It should be noted that 31 December 2020 remains the relevant cut-off date for assessing whether deforestation-free status has been achieved. Deforestation occurring after this date precludes EUDR compliance for the relevant commodities and products. 

Relationship between the EUDR and other legal acts

With its aim of making supply chains more sustainable, the EUDR complements a wide range of European and national legal acts that also set out due diligence requirements within the value chain. Three of these are mentioned below.

EUTR

Regulation (EU) No 995/2010, which prohibits the placing on the Union market of timber and timber products derived from illegal logging (EUTR), is rendered obsolete by the EUDR. Whilst the EUDR continues to require the legality of the relevant products (see Recital 80), it simultaneously extends the requirements previously set out in the EUTR to include sustainability aspects.

The German ‘LkSG’ and CSDDD 

With the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, ‘LkSG’), the German legislature aims to ensure both environmental protection and the protection of human rights along global supply chains. 

This objective is also pursued by the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), which is to apply from 26 July 2029 and is expected to lead to reforms of the LkSG.

Although both pieces of legislation differ from the EUDR in terms of their scope, target audience and level of regulation, there is an overlap in substance in that they impose an obligation on companies to document and analyse their supply chains. It is therefore advisable to design internal EUDR compliance structures in such a way that existing due diligence processes relating to the LkSG can be utilised. This will also ensure that the newly created structures can be used for the CSDDD, which will come into force at a later date.

Outlook

Given the broad material scope of the Regulation, companies would be well advised to thoroughly review their relevant products for any potential overlaps. If they place relevant commodities or products on the market, make them available or export them from the EU, they should make urgent use of the remaining transition period until the end of 2026 to adapt their compliance structures and due diligence processes to the new regulatory requirements at an early stage.

Enterprises should also be aware, with regard to their own supply chain, of the applicable obligations and the need to pass on these obligations along the supply chain. Otherwise, they may face not only public-law sanctions but also potentially far-reaching civil liability consequences.

Finally, given the dynamic history of the EUDR, it is also worth keeping a close eye on the ongoing process for the practical implementation of the Regulation, as outlined above, in order to be ‘ready’ by the relevant deadline.

We are, of course, available to provide further information – we would be happy to support and advise you.