Between 2001 and 2024, the world lost 177 million hectares of tree cover — a loss that is likely permanent. Most of this loss was the result of clearing for farms, pastures and tree crop plantations. This daunting number is a wake-up call, underscoring the urgent need for stronger action to curb deforestation for farming and forest degradation from wood production.
As a major buyer of commodities largely responsible for fueling deforestation — such as palm oil, cocoa, coffee, soy, cattle and timber — the EU has both a responsibility and an opportunity to help shift global markets toward more sustainable supply chains. The EU Deforestation Regulation (EUDR), adopted in 2023, requires businesses to demonstrate that the products they sell or export to the EU do not originate from land that was recently deforested or degraded. It is a key step in responding to today’s deforestation and supporting countries in achieving their national policies on protecting forests, such as moratoria on farms or concessions in primary forests or on peat.
Yet despite its promise, the regulation has faced delays and pushback, threatening its timely implementation. At a time when forests are increasingly under threat, it’s more urgent than ever to understand the regulation and ensure its full and rapid implementation.
What Is the EUDR?
The EUDR is a landmark law that came into force in June 2023. Its goal is to ensure that certain products sold in or exported to the EU do not come from land that was deforested or degraded after Dec. 31, 2020. The regulation is designed to prevent EU consumer demand from driving further forest loss or damage, while also reducing the region’s contribution to greenhouse gas emissions and global biodiversity decline.
The EUDR covers timber and six key agricultural commodities: cattle, cocoa, coffee, oil palm, rubber, soy, as well as products made from them such as beef, furniture and chocolate. To be sold in or exported from the EU market, these products must meet the following three conditions:
- They are deforestation-free.
- They have been produced in compliance with the relevant laws of the country of origin.
- They are covered by a due diligence statement, showing that the company has checked the origin and ensured the products meet EUDR requirements.
This means businesses must demonstrate that any EUDR-covered commodities were not produced on land that was deforested nor did they contribute to forest degradation after the Dec. 31, 2020 cutoff date. Although the regulation is legally in place, companies are not yet required to comply yet. The rules will apply starting from Dec. 30, 2025, for large enterprises and June 30, 2026, for small and medium-sized businesses.
Why Is the EUDR important?
The EUDR offers a major opportunity for the EU to reduce its role in global deforestation and biodiversity loss, as well as help create deforestation-free supply chains. It supports the commitment made by the 144 countries that signed the Glasgow Leaders’ Declaration in 2021 to halt and reverse forest loss and land degradation by 2030. It can also serve as a model for other major consumer markets looking to lower their environmental footprints.
Since 2014, the EU has been the second-largest importer of goods linked to tropical deforestation after China. In 2017 alone, it accounted for 16% of global deforestation tied to international trade — equal to 203,000 hectares of forest.
More recently, in 2021, the EU was among the world’s top five importers of five of the six agricultural commodities covered by the EUDR (cocoa, coffee, palm oil, rubber and soy) and the largest importer of cocoa beans and coffee worldwide1 . Among all the agricultural products the EU buys, beef, cocoa and palm oil were linked to the most deforestation in the countries they came from. In fact, out of 160 agricultural commodities imported by the EU, just six — beef, palm oil, soy, cocoa, coffee and rubber, as covered by the EUDR — made up 58% of the estimated forest loss tied to EU imports.
By reducing the EU’s forest-loss footprint and tackling deforestation risks in its supply chains, the EUDR could help reverse deforestation worldwide. In 2024, a record 6.7 million hectares of primary tropical forests were lost — nearly double the 2023 rate and equivalent of losing 18 soccer fields of forest every minute. While wildfires captured global attention, much of the increase was due to agricultural conversion and logging.
What Challenges and Setbacks Has the EUDR Faced?
Since the EUDR came into force in 2023, it has seen a few key developments.
In December 2024, the EU postponed the start of EUDR compliance by 12 months to give companies more time to prepare to meet the regulation’s requirements. The rules will apply from Dec. 30, 2025, for large enterprises and June 30, 2026, for small and medium-sized businesses.
In May 2025, the European Commission published the regulation’s benchmarking classification system, which ranks countries as low, standard and high risk based on indicators assessing the deforestation risk linked to commodity production in each country. The ranking system was designed to help businesses and enforcement authorities in the EU to conduct due diligence and enforce compliance. The risk levels indicate the percentage of checks on shipments, with greater scrutiny given to higher-risk countries.
Now, new proposals call on the EU Commission to revise the benchmarking classification system introduced in 2025, suggesting it be removed altogether or that a “no risk” category be added to exempt some countries from any due diligence. But changes like these could create loopholes and ultimately weaken the regulation’s effectiveness. The European Parliament already rejected a similar idea in 2024 for that very reason.
The EUDR was agreed upon following a lengthy negotiation between EU institutions and member states, as well as impact assessments and extensive consultations. Derailing its implementation would penalize producer countries and companies that have already invested in compliance, and it would create confusion and uncertainty in the EU market. The regulation may not be perfect, but it’s a necessary step toward deforestation-free supply chains. Many companies have already shown that EUDR compliance is possible, and several have urged the EU to uphold the legal text and stick to implementation timeline.
Since adoption, the EUDR has faced criticism from both inside and outside the EU. Most concerns focus on cost and complexity of compliance, as well as fairness, particularly for smallholder farmers. In response, the European Commission, EU member states and other development institutions have ramped up investment in EUDR preparedness by issuing resources and guidance, with a particular emphasis on preventing smallholder exclusion from the EU market.
What Counts as Deforestation and Degradation Under the EUDR?
The regulation’s definition of a forest largely follows the UN Food and Agriculture Organization (FAO) which defines it as land larger than 0.5 hectares with trees taller than 5 meters and a canopy cover of at least 10% that is not primarily used for farming or urban development.
Under the EUDR, deforestation refers to clearing forest to make way for agriculture. The key factor is the conversion of land that was forest in 2020 into farmland — such as pastures or soy plantations. It’s a complete land-use change: the forest is no longer a forest.
- If that forest is cleared — whether by people or natural events like fire — and then converted into farmland, such as pastures for raising cattle or fields for soy or palm oil, it is considered deforestation.
- However, if a forest is cleared, for example by fire (whether from human activity or natural causes) and is not used to produce any of the six EUDR-covered agricultural commodities, it is not considered deforestation under the regulations.
- Forests used for wood production are not considered deforestation unless they’re also used for agriculture, for example, cattle grazing under the tree canopy.
The EUDR also covers degradation. Land which was forest in 2020 can be used for wood production and remain classified as a forest, even if it’s temporarily unstocked, according to EUDR definitions. A forest used for wood production is not considered degraded unless there’s a specific structural change, such as:
- Converting primary forest (native, untouched forest) into other wooded land (trees have 5%-10% canopy cover) or into plantation or planted forest.
- Converting naturally regenerating forest (which has largely grown back on its own) into other wooded land used or plantation forest.
Who Does the EUDR Affect?
The EUDR affects any company that imports, produces or exports specific products, and their derivatives, to or from the EU market. This includes operators (those placing products on the market or exporting them from the market) and traders (those distributing and selling products).
It applies to companies based in the EU and internationally, and to businesses of all sizes, from micro and small enterprises to large corporations. However, larger businesses face stricter reporting requirements than smaller ones.
The EUDR spans multiple sectors, from food and beverage (such as companies sourcing cocoa and coffee) to fashion (leather goods, for example) to the healthcare industry (such as latex gloves).
How Are Countries and Companies Preparing for the EUDR?
Under the EUDR, companies must prove that products linked to deforestation or degradation after Dec. 31, 2020, are not entering the EU market. This requires a due diligence process: collecting supply chain information (including geolocation), assessing the risk of deforestation and taking steps to eliminate any identified risk before the product can be put on the market.
Country-level efforts
Many producer countries are already taking concrete steps to prepare for the EUDR, from adopting national plans to developing traceability systems and improving data transparency. For example, Indonesia, Ghana and Vietnam are investing in government-led efforts to make information available to companies that must comply with the regulation. Delaying enforcement or altering the regulation’s scope could undermine these leading producer countries.
Vietnam stands out as a strong example of how the EUDR is reinforcing national efforts to combat deforestation. As a top exporter of rubber and coffee, the country has shifted its focus from illegal logging to broader deforestation risks in agriculture since regulation’s introduction. In 2023, the Ministry of Agriculture and Rural Development adopted a national action plan prioritizing sustainable agricultural transformation. The following year, it launched a traceability system for coffee farms, piloting geospatial verification (such as satellite images) in key producing provinces. Developed through public-private collaboration, the system cross-references land-use maps and cadastral data to ensure EUDR compliance. Plans are also underway to expand it to rubber and cocoa.
Vietnam’s progress shows how the regulation can act as a catalyst for stronger policy alignment between global market demands and local sustainability goals.
EU member states are also preparing by using satellite and aerial earth observation data, such as forest maps from 2020 (the EUDR cutoff year) to detect deforestation, alongside other monitoring solutions and tools to support compliant imports.
Private-sector efforts
Companies across supply chains are ramping up EUDR preparations, sparking a wave of innovation in monitoring and traceability. Many are developing satellite-based systems to verify deforestation-free sourcing, training smallholder farmers to meet EUDR requirements and partnering with governments and NGOs to improve data sharing and risk assessment.
For example, Unilever and Meridia are working together to map smallholder farmers in Indonesia, making it possible to trace palm oil from plantation to mill. The Global Platform for Sustainable Natural Rubber (GPSNR) has created a system to help companies follow sustainability practices and demonstrate EUDR compliance. Open-source platforms like WRI’s Global Forest Watch are also supporting companies in verifying supply chains.
These efforts from governments, companies and EU countries show how the EUDR is already driving unprecedented action — transforming compliance from a burden into an opportunity to build more responsible and transparent supply chains. The challenge now is scaling these solutions across all commodities and regions.
What’s Next for the EUDR?
The EUDR represents a major milestone in the fight against commodity-driven deforestation.
The EU must reject attempts to weaken the regulation’s core requirements. Its effectiveness depends on maintaining its ambition without dilution or delay. Backtracking at this stage would undermine the EUDR’s credibility and send the wrong signal to global markets.
At the same time, the EU should also step up efforts to provide clear guidance to businesses, along with practical training and support to help them develop the skills needed for compliance, especially for small businesses that may otherwise struggle to meet requirements.
Footnotes
1Timber and timber products are not included.
