The new EU Zero Deforestation Regulation (EUDR): challenges and opportunities

What is the EUDR regulation?

The European Deforestation-Free Regulation (EUDR), approved in 2023, aims to combat global deforestation and forest degradation. Companies that import products such as soy, beef, cocoa, timber, palm oil, and other derivatives are required to ensure that their production does not contribute to deforestation. The regulation introduces obligations for due diligence, traceability, and transparency along the entire supply chain.

Challenges and Opportunities of the EUDR Regulation

The debate in Europe has led to the approval of a regulation that imposes stricter requirements on companies. The regulation’s goal is to ensure that the raw materials and products entering the EU market are not only legal but also sustainable—meaning their production has not contributed to deforestation and forest degradation. This regulation covers soy, beef, palm oil, timber, cocoa, coffee, and some derivative products such as leather and chocolate. For timber products, the new regulation will replace the existing EU Timber Regulation (EUTR), introducing stricter requirements for importers regarding due diligence, raw material traceability, and supply chain transparency.

Results and Limitations of the EUTR

Ten years after its adoption, the EUTR has achieved some positive results, such as a reduction in illegal timber imports into the EU and increased market awareness regarding illegal logging practices. Additionally, there has been a greater commitment from market operators to control supply chains. However, achieving the regulation’s goals has often been difficult and problematic due to a complex and time-consuming implementation process.

Challenges in Implementing the EUTR

The challenge of efficiently and quickly implementing the new regulation in member states has led to a reflection on specific issues encountered during the EUTR’s application. Insufficient human and financial resources allocated to the Commission and competent authorities, initial delays in implementing the regulation in some member states, a limited number of inspections, and non-uniform sanctions among states were significant factors that hindered the uniform interpretation and coherent application of the regulation, particularly in its initial implementation phase.

Autonomy of Member States in the EUDR Regulation

Regarding this, it is worth noting that 12 member states, including Italy and Spain, defined the competent authority and sanctions for potential violations more than a year after the regulation came into force (March 2013). The new regulation has made significant progress by redefining the areas of autonomy granted to individual member states, for example, by requiring that competent authorities are provided with sufficient resources and by introducing sanctions that must be proportionate to the environmental damage caused and its value. Additionally, the regulation provides a clearer legal framework for member states on how to carry out inspections and controls, for example, by setting minimum inspection levels.

Involvement of Customs Authorities in the EUDR Regulation

One of the most innovative changes includes the direct involvement of member states’ customs agencies, which will be able to detect and report potential risks even before goods enter the Union, with the possibility of blocking or seizing products at the borders. Furthermore, a new digital system (the so-called “register”) simplifies the management of data (geographical coordinates and country of production for each product), facilitates access to official information, and enhances cooperation between customs authorities and other competent institutions. However, these changes present significant challenges for national institutions, with the risk of substantially increasing the workload for the authorities involved. The greater political and economic weight of the new regulation will require more technical preparation on the part of the enforcement agencies and efficient coordination among national authorities to manage the regulation’s implementation efficiently and transparently across the entire territory.

Adequacy of EUDR Legislation

To ensure that the legislation is genuinely fit for purpose and the challenges to be addressed (sustainability, digitalization, and new actors involved) are met, ongoing negotiations on the text and its contents will need to take into account various factors, including the time and resources required for implementation in different national contexts, as well as the need to coordinate and harmonize future legislative steps of the various national authorities.

In conclusion, companies importing raw materials and products falling under the regulation’s scope will be significantly impacted by the new regulation and must prepare as soon as possible to comply with the new requirements. Etifor has been monitoring market trends for years and is at the forefront of scientific research and consulting on these issues. By applying the EMMA method, Etifor can support companies in developing deforestation-free supply chains.

For more information, also read “The New European Deforestation-Free Regulation Approved.”