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 some of their derived products, such as leather or furniture.

The EU wants to limit its impact on forests and published Regulation (EU) 2023/1115 to ban related products.
The objectives of the regulation are minimising the EU’s contribution to deforestation and forest degradation and reducing greenhouse gas emissions and biodiversity loss.

Which products are affected?

The EU Deforestation Regulation applies to all products as mentioned in Annex I to the regulation. The products are identified by their CN (Combined Nomenclature) or HS (Harmonised System) customs codes.  The table in Annex I mentions the related commodity as well.

The EU Deforestation Regulation (EUDR) replaces the EU Timber Regulation (EUTR). Most of the wooden products that were excluded from EUTR are now included in the EUDR. The EUDR also adds articles in CN (HS) chapter 49: printed books and papers, and chapter 9401: seats.

Excluded products

Some products are excluded based on their CN code, even though they may contains relevant commodities, examples are 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.
More guidance is provided by the European Commission via FAQ Deforestation Regulation.

Obligations

The operator places products on the EU market, similar to an importer.
The trader (not being an operator) makes products available on the market, similar to a distributer.

Operators should: 

• Only place deforestation-free products on the market; 
• Exercise 'due diligence' and use relevant procedures ('due diligence system'). 

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. 

Due Diligence system

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 and;
• 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 taking into account 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.
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.

Due Diligence Statement

All operators who conclude that the product complies with the EUDR, must submit a due diligence statement (with all reference numbers) in which they confirm that due diligence was carried out and that no or only a negligible risk was found that the product does not comply with Regulation (EU) 2023/1115.
The contents of the Due Diligence statement is detailed in Annex II of the EUDR.

Information system

A due diligence statement must be submitted to the EU Information System before making the products available, placing them on the market, or before exporting them. For every due diligence statement, a unique reference number will be generated. The information system will be operational as soon as the regulation becomes into force. The system will be interconnected with customs IT systems.

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.

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 they will stay 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. Its deadline was extended with one year in December 2024. 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. 

More information

Overview of the Regulation on Deforestation-free products by the European Commission.

How to comply with the Deforestation Regulation by the European Commission.