From Timber to Deforestation Regulation

 

The main driver of deforestation and forest degradation is the expansion of agricultural land, which is linked to the production of seven commodities: cattle, cocoa, coffee, oil palm, rubber, soya, and wood; and many of their derived products, such as leather or furniture.

The EU wants to limit its impact on forests and approved Regulation (EU) 2023/1115 to tackle it.
The objectives of the regulation are minimizing the EU’s contribution to deforestation and forest degradation and reducing greenhouse gas emissions and biodiversity loss.

The EU Deforestation Regulation (EUDR) replaces the EU Timber Regulation (EUTR), enlarging both its obligations and the product scope.

In this page we provide you with an overview of the EUDR and its key obligations.
More guidance is provided by the European Commission at the EUDR Implementation Helpdesk and through the FAQ Deforestation Regulation.

Which products are affected?

The EUDR obligations apply to all products mentioned in Annex I of the Regulation. The products are scoped using their CN (Combined Nomenclature) or HS (Harmonised System) customs codes.

The obligations apply to products that enter the EU market or are exported from the EU.

Excluded products

Some products are excluded based on their CN code, even though they may contain relevant commodities. For example, this is the case for leather car seats, or soap containing palm oil.
Usage of recycled materials is encouraged by the EU, therefore products that are produced entirely from material “that has completed its lifecycle” (waste) are excluded from the scope of the EUDR.
Packaging material such as wooden packing cases, boxes, crates or pallets that is only used to support, protect, or carry other products that are placed on the market is not included in the EUDR. 

Obligations

Different companies have different EUDR obligations depending on their size and whether their role in respect to the product itself. A simplified overview is:

The operator places products on the EU market, like an importer.
The trader (not being an operator) makes products available on the market, like a distributer.
Operators should: 

• Only place deforestation-free products on the market 
• Exercise 'due diligence' through the relevant procedures ('due diligence system')
• Submit a Due Diligence Statement

Traders should provide traceability of the products in the supply chain and keep records: 

• To identify suppliers, either other traders or operators 
• To identify traders that have been supplied to
• Non-SME traders should submit a Due Diligence Statement

Due Diligence system

Operators shall be able to demonstrate how information was gathered, what criteria were used for the risk assessment and how decisions on risk mitigation were taken.
Operators shall issue a due diligence statement and submit it to the EU Information System.
The collected information and the statement shall be kept for 5 years from the date of placing the product on the market.

Operators are required to implement a due diligence system and carry out due diligence before they place a product on the market. Due diligence means providing evidence that products are both:

• Deforestation-free: produced on land that was not subject to deforestation after 31 December 2020
• Legal: compliant with all relevant applicable laws in force in the country of production.

The due diligence procedure requires the fulfilment of the following three elements and is complemented by reporting requirements.

• Information - Access to information describing the commodities species and products, country of production, geolocation of all plots of land of production sites, quantity, details of the supplier and information on compliance with national legislation and customs regulation.
• Risk assessment - Assess the risk of deforestation in the supply chain, based on the information mentioned above and considering criteria set out in the regulation.
• Risk mitigation - If the assessment shows that there is a risk of deforestation in the supply chain, that risk shall be mitigated by requiring additional information and verification from the supplier and introducing adequate and proportionate policies, controls and procedures to manage effectively the risks of non-compliance. 

Operators shall be able to demonstrate how information was gathered, what criteria were used for the risk assessment and how decisions on risk mitigation were taken.

The collected information shall be kept for 5 years from the date of placing the product on the market.

Due Diligence Statement

Operators shall issue a Due Diligence Statement and submit it to the EU Information System (TRACES).

All operators who conclude that the product complies with the EUDR, must submit a DDS (with all reference numbers) in which they confirm that due diligence was carried out and that no or only a negligible risk was found.
The contents of the Due Diligence statement is detailed in Annex II of the EUDR.

The Statement shall be kept for 5 years from the date of placing the product on the market.

Geographical data

A key requirement is to obtain the geographic coordinates. With collecting geolocation coordinates of the plot of land where a commodity comes from, one can demonstrate that there is no deforestation on that specific location. 

Via air photos, satellite images or mobile phones, widespread and free-to-use digital applications (e.g. Geographic Information Systems (GIS)) geolocation coordinates can be collected. It is important that the information is linked with geotags and time stamps. The EU supports companies with the EU Observatory monitoring tool, but there are other monitoring satellite tools available.

Operators and traders must fulfil the obligation to verify that the geolocation information is correct. Any product or commodity covered by this regulation whose geolocation coordinates have not been collected and submitted as part of a due diligence statement is prohibited to be placed on the EU market.

Authorised representative established in the Union, may submit a due diligence statement on behalf of an operator or trader, however the operator or trader remains responsible for the compliance of the product.

Deadlines

The Regulation (EU) 2023/1115 (EUDR) on deforestation and forest degradation entered into force on 29 June 2023 and replaces the Timber Regulation (EU) 995/2010. Medium and large-sized companies will have till 30 December 2025 to comply with the EUDR. For micro or small enterprises, this deadline is six months later: 30 June 2026. 

How ProductIP helps you with EUDR

At ProductIP we can help you with your EUDR compliance journey.

We do that by giving you and your suppliers access to a smart form to gather all data you need to comply with the EUDR obligations. The form adapts as the user enters information, so to show only the EUDR requirements that apply to their product.

The smart form also helps you with the EUDR due diligence:  a risk model automatically tells where risks are more likely and prompts the supplier to show evidence on how they are mitigating them.

If you approve the work of the supplier, the system will automatically create a Due Diligence Statement, opening the EU market to your product.

More information