EUDR – European Deforestation Regulation

Your expert for questions

Andreas Feiner ist Partner, Sustainability bei PwC Deutschland

Andreas Feiner
Partner, Sustainability Services at PwC Germany
Phone: +49 171 8404662
Email

How to minimise the risk of contributing to global deforestation

Are you familiar with the European Deforestation Regulation (EUDR)? Do you know whether and how the regulation applies to you?

The EU regulation on deforestation-free supply chains, which went into effect at the end of June 2023, requires companies to fulfil due diligence obligations to reduce global deforestation. The deciding factor is the “deforestation status” of production areas as of December 30, 2020, which must be verified along the supply chain.

“In the case of non-compliance with the EUDR, companies could face fines exceeding four percent of their annual turnover.”

Andreas Feiner,Partner, Sustainability Services at PwC Germany

Understanding the extent of their products’ implications under the EUDR is crucial for companies, whether as operators or traders. This knowledge allows companies to navigate the market and trade relevant commodities such as coffee, cocoa, cattle, palm oil, soy, rubber, and wood, along with over 800 derived product categories within the EU.

Get to Know Our Team

Analyse Supply Chains, Identify Gaps and Minimise Risks

Like the Supply Chain Due Diligence Act (LkSG), the focus is shifting to the traceability of the entire supply chain and extensive due diligence obligations are arising including, provision of geolocation of areas of origin, ensuring deforestation-free production and compliance with the legislation of the country of production. For companies, this means they must precisely analyse the supply chains for certain product groups which, may lead to numerous questions:

  • Do you know the EUDR exposure of your company and its product groups and commodities?
  • Can you trace your procured commodities back to the area of production?
  • Do you know if the production was compliant with all the legislation of the country of production?
  • For certain commodities or products, can you substantiate that their production has not contributed to deforestation or forest degradation?
  • What steps are necessary to meet the EUDR requirements?
Infographic: Timeline for implementation of EUDR

Frequently asked questions

Non-SME operators and traders have until December 30, 2024, to review their global value chains and implement the due diligence obligations required by the EUDR. An extended deadline to June 30, 2025, applies to SME operators.

The initial focus of the EUDR is on coffee, cocoa, cattle, palm oil, soya, rubber and wood, as well as a large number of derived products. The requirements include leather goods, tires, seals, chocolate, roasted coffee, glycerine, soya oil, plywood, furniture and various paper and print products.

Due diligence includes the collection of information, including data on the geolocation of production areas, risk assessment and, if necessary, risk mitigation measures. As part of the risk assessment, in addition to assessing the risk of deforestation and forest degradation, aspects such as the involvement of indigenous peoples, compliance with the legislation of the country of production and mixing with non-compliant relevant products must also be analysed and evaluated. Based on the collection of information and risk assessment, companies are required to make a due diligence statement and take responsibility for compliance before marketing or exporting relevant commodities or products. 

The measures and procedures introduced by non-SME market participants and non-SME traders to fulfil due diligence obligations must also be reviewed and publicly reported at least annually.

Companies will now have to use the short transition period to analyse their own procurement and product portfolios and identify any gaps. As with the Supply Chain Due Diligence Act (LkSG) and the upcoming Corporate Sustainability Due Diligence Directive (CSDDD), transparency and data availability are key to fulfilling the requirements. In addition to achieving compliance with the EUDR, companies can also benefit from transparency. This enables them to identify and proactively address risks and opportunities in their own supply chain.

If companies are unable to fulfil the required due diligence obligations, the commodities and products covered by the regulation can no longer be placed on the market. In addition to reputational risks, violations of the regulation also expose companies to massive financial risks, through:

  • Compulsory fines and penalties  
  • Temporary ban on the placing on the market, trade or export of relevant commodities or products  
  • Temporary exclusion from public procurement 
  • Reimbursement of the authorities’ financial expenses

Our services

Status quo & gap analysis

Analysis of existing data and the resulting identification of data gaps provides the foundation for your journey to EUDR compliance. We also analyse your existing system landscape and processes in order to develop resource-saving and technology-based approaches from the very beginning.

Strategy

In the strategy phase, our interdisciplinary teams will help your company with comprehensive expertise and many years of experience. In the area of sustainable supply chains, we support you in embedding the requirements in your existing strategy or with making adaptations where necessary. We also advise you on strategical changes regarding future procurement.

Operationalisation – implementation and control

In this phase, we identify and prioritise appropriate actions for the procurement of the required data and for the risk assessment of your procured commodities and products. We not only support you in developing an implementation path, but also show you suitable tools and opportunities for cooperation and, optionally, develop a customised due diligence system tailored to your company.

EUDR reporting obligation

To meet the reporting obligations required by the EUDR, we support you with our expertise in external reporting requirements. We help with the comprehensive and EUDR-compliant development of a formalised reporting process and the publication of the information. This enables you to fulfil the requirement for verifiable transparency within your supply chain.

Webcast recording (German): Deforestation-free supply chain – challenges for industry and retail

In our webcast about deforestation-free supply chains and its challenges for industry and retail we provide an overview of the background and requirements facing your company so that you can prepare for the EUDR and identify areas where action is needed. Please note that it is in German language.

Learn more

Your added value

With our holistic approach, we provide you with support throughout the entire process to meet the requirements of the EUDR. From identifying the products and business units affected by the EUDR, prioritising and strategically addressing existing gaps, to the optional design of your due diligence system, through to operationalisation and reporting – our experts are at your side with reliable advice and information.

Follow us

Contact us

Andreas Feiner

Andreas Feiner

Partner, Sustainability Services, PwC Germany

Tel: +49 171 8404662

Florian Pütz

Florian Pütz

Senior Manager, PwC Germany

Tel: +49 151 67255027

Mirjam Kolmar

Mirjam Kolmar

Director, Sustainability Services, PwC Germany

Tel: +49 1516 2904732

Hide