Navigating the path to EUDR compliance

Although EUDR implementation may have been pushed back by a year (to December 2025 for large businesses and June 2026 for SMEs), companies shouldn’t see it as opportunity to delay their compliance journey.

The EUDR demands unprecedented levels of supply chain transparency and due diligence to ensure relevant products entering or leaving the EU market don’t contribute to deforestation and complies with regulations from the place of production. Now is the time to start designing and implementing the processes and tools to deliver this new data-led approach.

Understanding your obligations

The foundation of successful compliance begins with understanding whether and how the regulation applies to your business. This requires careful analysis of both your products and your role in the supply chain.

The EUDR covers seven key commodities: cattle, cocoa, coffee, oil palm, rubber, soy, and wood – along with derived products. To determine if your business is affected, check whether your products are classified under the specific HS customs codes listed in Annex 1 of the regulation.

Your obligations will vary depending on your role in the supply chain. The EUDR primarily addresses operators (those placing products on the EU market for the first time or exporting them from the EU) and traders (those making products available on the market). However, there are three distinct ways of being an operator: importing products from outside the EU, manufacturing and placing relevant EU-produced commodities on the market for the first time, or exporting them from the EU.

Some businesses may find themselves exempt, such as those dealing exclusively with recycled products or waste materials, but documentation to prove this exemption will still be required.

Building your compliance framework

Once you’ve confirmed the regulation applies to your business, creating a structured approach to compliance is essential. This means establishing a management system that documents your due diligence process.

That doesn’t have to expensive new software. It could be as straightforward as a manual that outlines your processes. The key is having documented procedures that demonstrate how your organisation performs due diligence and prepares its declarations.

Many businesses already have processes for risk assessment and due diligence that can be adapted to meet EUDR requirements. At Peterson Solutions, we work with clients to develop tailored manuals that outline step-by-step processes for performing due diligence and preparing required declarations.

Supply chain transparency: The central challenge

Perhaps the greatest challenge of EUDR compliance is achieving the required level of supply chain transparency. Many companies currently lack full visibility across their entire supply network – a gap that must now be closed.

The regulation requires detailed geolocation data for the land where commodities were produced. Specifically, the polygon coordinates (or when less than 4 ha, GPS points) of the cultivation plots. This requires close cooperation with suppliers.

Building strong relationships with suppliers should be an immediate priority. This is particularly important since non-EU suppliers aren’t legally bound by EUDR, but their cooperation is essential for those businesses that are covered by the regulation.

Some commentators even expect the EUDR to fundamentally change traditional buying patterns. For example, commodities like palm oil or soy that were previously purchased while in transit may now require advance documentation and verification before purchase decisions can be made.

Risk-based verification strategies

The EUDR follows a risk assessment approach, requiring companies to demonstrate they’ve performed due diligence and that the risk of deforestation and non-compliance with local regulations is negligible.

For companies with numerous suppliers, developing a risk-based verification protocol makes sense. This might involve different verification approaches depending on the supplier’s risk profile:

• for certified materials from trusted sources, documentary verification might be sufficient
• for medium-risk suppliers, remote verification processes could be appropriate
• for high-risk sources, on-site audits may be necessary.

This tiered approach allows businesses to focus resources where risk is greatest, while maintaining compliance across all supply chains.

Technology solutions for compliance

While not every business needs sophisticated software, the volume of data required for EUDR compliance may make digital solutions the easiest option for many companies.

For mapping requirements, technical tools will likely be needed to properly record and manage polygon coordinates. Additionally, companies must maintain evidence of their due diligence for five years, creating substantial documentation requirements.

Several technology solutions are emerging to support EUDR compliance, including platforms for documentation exchange, record-keeping, and mapping requirements. Peterson Solutions, for example, is developing technology solutions that can be particularly valuable for businesses with complex supply chains.

Competitive advantage through early adoption

Despite the extended deadline, companies should use this additional time wisely. Those that proactively demonstrate compliance may gain significant competitive advantage in the marketplace. As buyers begin prioritising suppliers who can provide necessary documentation, early adopters will have a clear edge.

With potential penalties for non-compliance including confiscation, market access restrictions, public procurement and funding restrictions, and fines reaching up to 4% of annual turnover, the stakes are high. By taking practical steps now, businesses can not only ensure regulatory compliance, but contribute to the vital global effort to combat deforestation.