This article is the English version of the article you've provided, titled "EUDR – On the (Sustainable) Wooden Path?" with a focus on insights for businesses adapting to the EU Deforestation Regulation. It was published here: https://exportmanager-online.de/liefern/eudr-auf-dem-nachhaltigen-holzweg-23914/
EUDR – On the (Sustainable) Wooden Path?14 January 2025, by Arne Mielken, Customs Manager
The EU Deforestation Regulation (EUDR) has sparked significant debate as a European response to combat global deforestation. But what does this regulation entail? This article delves into its provisions, slated to take effect at the end of 2025.
Payment Delays and Market Dynamics
Recent surveys reveal that 60% of companies in Poland experienced payment delays in the past six months, a rise from 49% in 2023. Although this marks a decline in payment discipline since 2024, it remains significantly better than pre-pandemic levels, where over 90% reported delays in 2019. Comparatively, neighbouring economies report similar challenges, with 78% in Germany and 85% in France facing delays.
Scope of the EUDR: Imports and Exports
It is both logical and necessary that products sold or exported from the EU must be "deforestation-free." Adopted in May 2023, this regulation targets key commodities linked to deforestation. German businesses have voiced concerns over the dual impact on imports and exports, with the EUDR posing significant implications for their operations. Following a year-long postponement, the regulation will apply initially to large companies starting in December 2025.
Commodities Linked to Deforestation
The EUDR covers a range of commodities associated with deforestation, including:
Beef and beef products
Cocoa and chocolate
Coffee
Soy and soy products
Palm oil and derivatives
Rubber
Wood and paper products
Wooden furniture
Personal care products containing palm oil derivatives
Businesses should also be aware of additional materials linked to deforestation as determined by EU risk assessments.
Balancing Environmental Goals with Industry Concerns
The EUDR is seen by companies and environmental advocates alike as more than just a regulatory challenge—it forms a crucial part of the EU’s broader environmental agenda. Its goal is to curb the EU’s demand for deforestation-linked products, supporting climate and biodiversity objectives.
However, criticism abounds:
"Every product must be traced back to its origin."
"Small and medium-sized enterprises will suffer under these new rules."
"The EUDR is discriminatory."
"It will create excessive paperwork."
To address these concerns, the EU has clarified that while traceability is key, companies can report aggregated data rather than track each product individually. Digital systems and exemptions for smaller businesses aim to ease compliance burdens and streamline processes.
Implementation Timeline
To provide businesses with time for preparation, the EUDR will come into force as follows:
Large companies: 30 December 2025
Small and micro-enterprises: 30 June 2026
This extended timeline allows companies to adapt supply chains and establish compliance systems.
Key Compliance Requirements
Forests are vital for climate, biodiversity, and human well-being but are under pressure from agricultural expansion. The EUDR addresses this through strict due diligence obligations, including:
Product traceability: Businesses must trace materials back to specific plots of land using GPS coordinates and satellite imagery, ensuring no deforestation occurred post-December 31, 2020.
Risk assessment: A risk categorisation system classifies countries based on their deforestation connection, prompting businesses to adjust sourcing strategies accordingly.
Due diligence statements: Companies must submit compliance declarations confirming that their products meet deforestation-free criteria.
Human rights considerations: Companies must ensure ethical practices and respect land rights, particularly for indigenous communities.
Preparing for Compliance
Businesses should adopt proactive strategies, including:
Supply chain assessment: Map supply chains and assess suppliers for sustainability practices and documentation.
Implementation of traceability systems: Invest in digital tools like GPS tracking and satellite imagery to monitor raw material origins.
Due diligence procedures: Develop risk assessment frameworks to categorise suppliers and materials by deforestation risk and implement targeted interventions.
Training programs: Increase employee and supplier awareness of EUDR requirements.
Utilising EU-provided online tools and guidelines can also clarify compliance requirements and dispel myths.
Monitoring Regulatory Developments
Staying informed about EUDR updates and consulting EU regulatory experts will ensure businesses remain compliant and competitive in a rapidly evolving landscape.
Conclusion
The EUDR represents a significant step towards sustainability for the EU and global trade. By preparing proactively, businesses can mitigate risks and seize opportunities in a market increasingly focused on environmental accountability. In doing so, companies will find themselves firmly on the right path—sustainable wood or otherwise.
Contact: info[at]customsmanager.org
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