EU Deforestation Regulation mandates deforestation-free proof for seven commodities

The EU Deforestation Regulation requires companies to prove products sold in or exported from the EU are deforestation-free across seven commodities, with large operators complying from December 30, 2024. Indian exporters of coffee, rubber, leather, soya and wood products must implement geolocation-based traceability to retain EU market access.

The EU Deforestation Regulation (EUDR), a pillar of the Green Deal, requires companies to prove products sold within or exported from the EU are "deforestation-free." It targets seven commodities: cattle, cocoa, coffee, oil palm, rubber, soya and wood, plus derived products like leather, chocolate, furniture and printed paper. Adopted by the European Parliament and Council in mid-2023, large operators and traders must comply from December 30, 2024, while micro and small enterprises receive an extension until June 30, 2025.

The regulation affects operators and traders across the named commodity and derived-product supply chains, requiring a three-step due diligence system: collecting geolocation coordinates of production land, conducting risk assessments, and adopting mitigation measures such as independent audits. The European Commission will benchmark countries as low, standard or high risk, with high-risk regions facing enhanced scrutiny. Indian exporters of coffee, rubber, soya, wood, leather and related goods fall directly within scope and must map supply chains to specific plots.

Affected entities must invest in geospatial technology and supply-chain mapping, ensuring commodities are produced in accordance with the production country's laws, including land-use rights, environmental protection and labor rights. Companies should note that non-compliance carries fines up to 4% of total annual EU turnover, product confiscation, public procurement bans and market exclusions. Operators should align with their applicable deadline, December 30, 2024 for large firms and June 30, 2025 for smaller enterprises.

Key figure — Maximum penalty: fines up to 4% of a company's total annual EU turnover