EU Deforestation Regulation to impact coffee, cocoa, and wood trade

The European Union Deforestation Regulation (EUDR) is set to impose strict requirements on several commodity groups, including cattle, cocoa, coffee, palm oil, rubber, soy, and wood products. To comply, companies must ensure that products placed on or exported from the EU market do not originate from land deforested after a specific cutoff date and are produced in accordance with the laws of the country of origin.

Implementation timelines vary by business size: large and medium-sized enterprises must comply by December 30, 2026, while micro and small enterprises have until June 30, 2027. Companies are required to perform due diligence by collecting geolocation data for the plots of land where raw materials were produced to assess and mitigate risks.

Failure to meet these standards can result in severe penalties, including fines of up to 4 percent of total annual EU turnover, bans on market entry, and the confiscation of goods. The regulation aims to combat global deforestation, as EU market consumption is linked to approximately 10 percent of worldwide forest loss.