The EU Deforestation Regulation (EUDR) aims to ensure that raw materials traded in the EU or exported from the EU, and products made from them, do not contribute to deforestation. Originally, the EUDR was supposed to apply from 30 December 2024, but was postponed by one year at short notice at the end of 2024. Now, a further postponement has been announced: the start date for most companies is now set for 30 December 2026. Micro and small enterprises must apply the regulations from 30 June 2026, unless they are already covered by the Timber Regulation (EUTR).
The renewed postponement of the EUDR was necessary because essential tools – in particular the central IT system for the exchange of due diligence declarations – do not yet appear to be stable and operational enough. The Commission emphasises that the delay will not significantly change the content requirements of the EUDR. However, there are also calls for additions – for example, the establishment of a ‘zero-risk category’ for countries with negligible deforestation risk. And the passing on of ‘DDS numbers’ in the downstream supply chain is being fundamentally questioned.
Social and political mandate for responsible procurement
Critics warn that the renewed postponement of the EUDR undermines political will and costs forest areas. In 2024, around 8.1 million hectares of forest were lost worldwide, as the latest Forest Declaration Assessment Report notes. The Amazon region was once again particularly affected: in Brazil, the increase in fires led to a new high in forest loss, while Bolivia even recorded a 200% increase in deforestation compared to the previous year. Overall, the report shows that, on average, 86% of global deforestation over the past ten years can be attributed to permanent agricultural use. In addition, gold and coal mining are also increasing as causes of forest destruction.
Against this backdrop, pressure is mounting on companies to prepare quickly despite the delay – because the core obligations of the EUDR continue to apply to wood-based products under the current EUTR. The social significance of the regulation cannot be denied either. In a world where climate change and environmental damage are increasingly existential issues, many retail groups, NGOs and investors have agreed that transparency in supply chains is not a luxury, but a basic principle of responsible procurement. As a result, companies today are under double pressure – they are expected to be economically successful and to assume ecological and social responsibility.
Politically, a balancing act is required. Parties and parliaments are urgently called upon to set framework conditions that ensure that the European economy regains momentum and that bureaucracy is noticeably reduced. At the same time, governments are under pressure from the public and the media: scandals involving secret child labour, deforestation or human rights violations along global supply chains quickly lead to demands from voters. For the EU, the EUDR is a flagship project: it signals global commitment to climate and sustainability, provides guidance to companies and creates a legal basis for sanctioning violations.
The EUDR has serious weaknesses in terms of content
However, as sensible as all these requirements are, their practical implementation faces considerable obstacles, especially for small and medium-sized enterprises. The EUDR often requires excessive detail, and we particularly criticise the following key points:
1. The obligation to pass on registration numbers along the entire trade and supply chain – without these numbers themselves providing any additional information – creates enormous bureaucratic effort with little benefit.
2. Extremely demanding requirements for the collection of geodata (e.g. polygon data at property level) are imposed. However, such data is often unavailable, legally sensitive or methodologically unclear – and without additional information, it is hardly meaningful for ESG risks.
In addition, there are many technical barriers: many companies, especially small and medium-sized enterprises, do not have sophisticated IT systems or data platforms to process such information efficiently and report it in a legally compliant manner. This creates a high risk of excessive demands: if only large corporations can meet all the requirements, there is a danger that small and medium-sized enterprises will be systematically disadvantaged or that necessary concessions will become a condition for political favour.
Practical proposal for simplifying the EUDR
In light of the above-mentioned complex situation, we propose limiting indications of origin to a realistic but nevertheless effective level – namely federal states or comparable subdivisions (e.g. using existing ISO codes). In combination with customs tariff numbers (HS codes) for raw materials, this would cover around 95% of the relevant sustainability risks. This solution has several advantages:
• ISO codes for federal states already exist and are internationally recognised.
• They can be easily integrated into IT systems and databases.
• This information is already common practice in the paper industry and is usually communicated via technical data sheets. This information should also not pose any problems for the sawmill industry.
• The effort required by companies remains manageable, while still allowing for meaningful differentiation of origin.
• Genetic or isotope technology can be used to reliably verify the regions of origin.
• For consumers, information such as ‘State X (Country Y)’ is comprehensible and useful – much easier to understand than coordinates or cryptic registration numbers.
• From a political and regulatory perspective, this fulfils the goal of transparency and traceability without overwhelming small and medium-sized enterprises.