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Imagine having to document that the products your company trades have not contributed to deforestation, either historically or going forward. This will soon become part of your reality, and the consequences of not being prepared can be far-reaching.
In December 2025, the EU's new Deforestation Regulation (EUDR) enters into force, and with it, many companies face a significant compliance challenge that requires thorough preparation and systematic processes. But how do you gain an overview, and what should you specifically do? In this article, we guide you through the EUDR and provide you with practical tools to ensure compliance.
EUDR – a new era for responsible supplier management
The EUDR entered into force on 29 June 2023, with effect from 30 December 2025. The regulation requires companies to implement concrete actions through a comprehensive due diligence process, documentation, risk minimisation and monitoring.
The purpose of the EUDR is to prevent products associated with deforestation from reaching the European market. By reducing the EU's impact on deforestation and forest degradation, the regulation also aims to curb climate change and biodiversity loss.
And while this may sound ambitious, it has very concrete implications for businesses.
The regulation requires companies that trade in selected commodities (see below) and derived products to conduct due diligence on their value chains. By encouraging organisations to source responsibly, these new rules play a crucial role in improving traceability in global supply chains.
Which products are covered by the EUDR?
Today, the EUDR covers seven commodities. These are cattle, cocoa, coffee, palm oil, soy, wood and rubber, each of which has many derived products such as leather, furniture and books. This means that a wide range of products – everything from meat products to books and rubber gloves – are covered by the regulation.
For companies, it is essential to understand whether they are covered, what the EUDR entails, and how they can meet the requirements. This means, in concrete terms, that companies must take responsibility for their supply chains and ensure that the products they trade do not originate from areas that have been or are at risk of being deforested since December 2020. This means that even commodities and products produced several years before the EUDR enters into force may be illegal to import or sell.
The due diligence process under EUDR
To comply with the EUDR, companies must conduct – or ensure that there has been conducted – a thorough due diligence process. This process includes, among other things, risk assessments, collection and reporting of detailed information about the origin of their products – down to geo-localisation of the source of the raw materials – and an annual public report.
The consequences of non-compliance should not be underestimated. In addition to reputational damage, companies risk fines of up to 4% of their total annual EU turnover, confiscation of products and revenues, prohibition of commercial activities within the EU and exclusion from public procurement.
Special exemptions for SMEs
Small and medium-sized enterprises (SMEs) benefit from certain relaxations, including:
- SMEs do not need to verify or submit due diligence statements for products that are already covered by a due diligence statement. They primarily only need to provide the reference number of the statement to authorities if asked.
- SMEs receive a delayed implementation of the EUDR, where obligations begin 6 months later than for larger companies.
- SMEs are not required to publish annual reports on their activities to comply with EUDR requirements.
It is important to note, however, that SMEs are still obliged to carry out the risk assessment if the product is not already covered by a due diligence statement.
Start now – implementation takes time
Compliance with the EUDR can be challenging, but it is also an opportunity to improve your ESG strategy, review your internal policies and processes and increase traceability in your supply chains.
Start with a risk assessment and a gap analysis, where you first evaluate your readiness to comply with the regulation. Once you have clarity on the regulation's relevance to your products and supply chains, and you have identified the gaps you need to address to meet the regulation's requirements, you can design or adapt your due diligence and governance processes.
Even though the EUDR was postponed by a year in December 2024, you need to start now because implementation can be time-consuming and challenging. And it requires a structured approach to ensure that you meet all aspects of the regulation.
The EUDR regulation is dynamic, and as recently as 15 April this year, the European Commission provided an update and a series of important clarifications. Therefore, it is important to continuously stay ahead of developments in this area.
How Basico can help
Basico can help assess the EUDR's significance for your business and develop a practical plan that ensures you are compliant from 31 December 2025. With our expertise in ESG and compliance processes, we can guide you safely through EUDR implementation, so you avoid both fines and reputational damage, whilst creating valuable transparency in your supply chain.
Do you need sparring?
Do you need guidance, a thorough risk assessment or help designing your due diligence process? We help you become compliant – and strengthen your ESG efforts and supply chain transparency.
