EUDR FAQ: The Most Important Questions About the Deforestation Regulation

The EUDR FAQ provides companies with answers to the most important questions regarding the EU Regulation on Deforestation-Free Products (EUDR). Who is affected? Which products are covered? How does the due diligence declaration work? And what does “deforestation-free” actually mean in concrete terms?

Answers to these and many other questions can be found in the official EUDR FAQs published by the European Commission and the Federal Office for Agriculture and Food (BLE). However, given the complexity and scope of these documents, it is not easy to keep track of everything.

In this blog post, we have therefore compiled a selection of particularly relevant EUDR FAQs and presented them in an easy-to-understand format. The focus is on fundamental questions that companies are currently grappling with most frequently—without claiming to be exhaustive, but with a clear focus on the essentials.

EUDR FAQ: Basics

What is the EUDR?

To combat ongoing global deforestation, the European Union has established a binding legal framework. The EUDR (EU Regulation on Deforestation-Free Products) is a European Union regulation that took effect in June 2023. It requires companies to ensure that certain raw materials and products—such as wood, soy, palm oil, coffee, or cocoa—are not linked to deforestation or forest degradation. The goal is to combat deforestation worldwide by allowing only products that are verifiably deforestation-free to be traded on the EU market.

When will the EUDR take effect?

The EUDR was adopted by the European Parliament and the Council of the EU on May 31, 2023, and entered into force on June 29, 2023. It was originally scheduled to take effect at the end of December 2024. Following a one-year postponement decided last winter, the regulation will now take effect on December 30, 2025.

The effective dates are staggered as follows:

Effective June 30, 2026, for micro and small businesses
Effective December 30, 2025, for large and medium-sized companies

What does the EUDR require?

Relevant raw materials may be placed on the market, made available, or exported only if they:

are deforestation-free (no deforestation since December 31, 2020),
were produced in compliance with the law in the country of origin,
and an electronic declaration of due diligence has been submitted.

A product is considered deforestation-free if it does not come from areas that were deforested after December 31, 2020. For wood products, this also means that the wood does not come from forests that have suffered forest damage—such as from unsustainable use—after December 31, 2020.

Companies that violate the provisions of the EUDR face severe penalties. These include fines of up to 4 % of annual revenue, the seizure of affected goods, and exclusion from public tenders. In particularly serious cases, a trade ban within the European Union may also be imposed.

How does the EUDR apply to composite products?

In the current FAQ (Question 1.3), the European Commission specifies the procedure for the special case of composite products. If a product contains several different relevant raw materials or products—such as a chocolate bar containing cocoa powder, cocoa butter, and palm oil—the economic operator placing this product on the market in the EU is required to fulfill its due diligence obligations only with respect to the main raw material and the relevant products derived from it. The raw material listed in the left-hand column of Annex I is decisive in this regard.

In the case of a chocolate bar (Code 1806), this is the raw material cocoa. The duty of care and the associated information requirements therefore apply only to those ingredients listed in the right-hand column of Annex I under “Cocoa”—in this case, cocoa powder and cocoa butter.

Is there a public reporting requirement under the EUDR?

In addition, major market participants are required to report publicly once a year on the implementation of their due diligence obligations. In this report, they disclose the measures they have taken to comply with their obligations under the EUDR. This reporting can be integrated into existing EU reporting formats, provided that the company is also subject to other relevant legal acts. For example, it is possible to publish EUDR-related content as part of the CSRD (Corporate Sustainability Reporting Directive) report.

However, the exact details of how this integration will be implemented in practice have not yet been finalized.

EUDR FAQ: Impact

Which products are affected by the EUDR?

Products that are not listed in Annex I of the Regulation are not subject to the requirements of the EUDR —even if they contain relevant raw materials that are, in principle, covered by the scope of the Regulation.

For example, soap containing palm oil is not covered by the regulation because it is not one of the listed products. Similarly , complex products such as cars with leather seats or tires made of natural rubber are not affected, provided their HS codes (customs tariff numbers) are not listed in Annex I —even if they contain components derived from raw materials subject to the EUDR. The listed HS code is therefore always the deciding factor.

Important: The European Commission may update the list of affected products in the future via a delegated act. Changes to Annex I are therefore possible and should be monitored by affected companies (see draft delegated act).

A common—yet often unclear—practical example involves packaging. In general, packaging is subject to the EUDR only if it is marketed as a standalone product. If, on the other hand, it is used exclusively for the protection or transport of other goods, the regulation does not apply.

What types of companies does the EUDR distinguish?

In addition to carefully determining whether a product falls under the EUDR—that is, whether it is listed in Annex I of the Regulation—it is equally crucial to understand that the scope and nature of the obligations depend heavily on where a company is positioned in the value chain and how large it is. Only by taking these factors into account can a company assess which specific requirements under the regulation must be met.

According to the EUDR, market participants are defined as any natural or legal person who, in the course of a commercial activity, first makes relevant raw materials or products available on the EU market (“placing on the market”) or exports them from the EU. These primarily include primary producers, importers, and exporters.

Downstream actors in the supply chain are also considered market participants if they transform a product listed in Annex I into another product also listed there. If a company is based outside the EU, the first customer located in the EU is considered a market participant within the meaning of the Regulation.

In addition, according to the EUDR’s definition, all actors in the supply chain who make relevant products commercially available on the EU market without placing them on the market themselves are considered distributors. These are typically actors such as retailers or wholesalers—for example, supermarkets—that supply products to end customers or other businesses after the products have already been imported into the EU market.

Example: Company A (a rubber importer), based in the EU, imports deforestation-free rubber and sells it to tire manufacturer B, which is also based in the EU. Company B uses this rubber to manufacture tires that fall under the products listed in Annex I of the Regulation and resells them to tire retailer C. In this case, Companies A and B are considered market participants, as they place relevant raw materials on the market or process them further. Company C, on the other hand, is considered a distributor provided that it makes the tires available on the EU market—that is, either by selling them directly to end consumers or by supplying them to other distributors.

The following chart illustrates the positions in the value chain:

To get an initial idea of how your company may be affected, please feel free to use our EUDR Quick Check.

What size categories does the EUDR specify for companies?

The EUDR also distinguishes in many areas—such as the obligations to be complied with—between whether the entities in question are so-called SMEs or non-SMEs. In addition, a later effective date applies to micro and small enterprises. This means that companies that were classified as micro or small enterprises as of December 31, 2020, in accordance with Directive 2013/34/EU, are granted an extended deadline until June 30, 2026.

A company is classified into a specific category (micro, small, or medium-sized enterprise) if, as of the balance sheet date, it falls below the respective thresholds for at least two of the three specified criteria. No more than one threshold may be exceeded.

An organization is considered a microenterprise if

the total assets do not exceed 450,000 euros,
net sales do not exceed 900,000 euros and
the average number of employees during the fiscal year is 10 or fewer.

An organization is considered a small business if

the total assets do not exceed 7,500,000 euros,
net sales revenue does not exceed 15,000,000 euros,
On average, the company had no more than 50 employees during the fiscal year.

An organization is considered a medium-sized enterprise if

the total assets do not exceed 25,000,000 euros,
net sales revenue does not exceed 50,000,000 euros,
On average, the company had no more than 250 employees during the fiscal year.

EUDR FAQ: Implementation

How does the submission of the due diligence statement work?

Before an EUDR-covered product is imported, exported, or made available within the EU, a due diligence statement must be submitted. It serves as proof that the company has fulfilled its due diligence obligations and that no risk—or only a negligible risk—of deforestation or illegal origin has been identified. By submitting the statement, the company assumes responsibility for ensuring that the products in question are deforestation-free. Annex II of the EUDR lists the required information.

The declaration is not submitted on paper or via a standardized form, but is filed digitally through the EU information system “TRACES” (Trade Control and Expert System). The system is user-friendly and provides drop-down menus for most fields to facilitate data entry. Registration and use of the system are already available via the website of the Federal Office for Agriculture and Food (BLE) —including a test environment for preparation.

In this so-called information system, the company receives a reference number upon submission of the due diligence declaration, which is mandatory for the import or export of relevant products. Under certain conditions, this reference number must also be passed on throughout the supply chain. The submitted declarations are reviewed by the respective competent EU authority —in Germany, this is the BLE.

The due diligence statement may refer to planned quantities and cover multiple partial shipments within a year, provided that all relevant information regarding the individual shipments is included. Companies are required to retain the due diligence statements submitted via TRACES for a period of five years.

How do the duties of care differ?

Under Article 5(1) of the EUDR, non-SME traders are considered market participants and are therefore subject to the full due diligence obligations set forth in the Regulation. They must submit a due diligence statement and demonstrate that the products they trade are deforestation-free.

Market participants in the downstream supply chain that are not SMEs may, when submitting their due diligence statement, rely on due diligence obligations already fulfilled in the upstream supply chain —by providing the corresponding reference numbers. However, pursuant to Article 4, paragraphs 9 and 10 of the EUDR, they are required to verify that due diligence was in fact properly fulfilled at that stage. Legal responsibility remains with them, even in the event of a violation. A full review of each individual due diligence statement is not mandatory. The most recent simplifications clarify that the minimum legal obligation for large downstream companies is to collect and use the reference numbers of their suppliers’ due diligence statements in their own due diligence statement. Therefore, the determination of due diligence obligations does not mean that you must verify every single upstream due diligence statement.

SME retailers, on the other hand, are exempt from the requirement to submit a due diligence statement. Nevertheless, they too may only make relevant products available on the EU market if they have certain information, such as details about suppliers and the reference numbers of the corresponding due diligence statements. This information must be retained for at least five years from the date of making the product available on the EU market and must be made available to the competent authorities upon request.

The following case study clearly summarizes the due diligence obligations for each company:

As a company, how can I go about implementing the EUDR?

The requirements of the EU Regulation on Deforestation-Free Supply Chains (EUDR) have been established—but implementing them poses significant challenges for many companies. From determining the extent to which they are affected, to navigating complex supply chains, to handling large volumes of data: the reality is often more complicated than it seems at first glance. Added to this are tight deadlines, legal uncertainties, and a lack of resources—both in terms of personnel and funding. So how can companies take a pragmatic first step toward compliance?

An important first step is to involve internal stakeholders early on —particularly those from the areas of procurement, sustainability, and quality assurance. This fosters a shared understanding of tasks, responsibilities, and risks.

Next, you should assess the extent to which your company is actually affected. After all, not every product that contains wood, soy, or other relevant raw materials is automatically subject to the EUDR. A targeted analysis can help you avoid unnecessary extra work. For an initial indication of whether your company is affected, please feel free to use our EUDR Quick Check.

Where possible, companies should take advantage of existing opportunities for simplification. For example, it may make sense to group batches with the same origin into a single due diligence statement or to review incoming upstream declarations on a risk-based basis rather than across the board.

In addition, clear processes are needed for risk analysis, the collection of geographic data, and documentation —ideally supported by digital systems to ensure transparency and traceability over the long term.

Last but not least, it is advisable to actively seek dialogue with suppliers. Only by working together can traceability throughout the supply chain be ensured—and thus the foundation for successful EUDR implementation be laid.

CONSUST supports you in implementing the EUDR

The EUDR presents companies with new challenges, but it also offers opportunities to strengthen their sustainability strategy and communicate it transparently. This represents a significant benefit for both your company and your stakeholders. Do you need assistance with preparing for and implementing the EUDR? Then contact us to schedule a no-obligation consultation.