How to prepare for EUDR compliance
GoodBlog | read time: 8 min
Published: 5 August 2026
The EU Deforestation Regulation (EUDR) raises the standard for environmental due diligence, introducing new requirements to manage deforestation risks in global supply chains. Designed to reduce the European Union’s contribution to deforestation and forest degradation, the regulation applies to businesses placing certain commodities and derived products on the EU market, making them available within the EU or exporting them from the EU.
For many organisations, compliance will require a significant change in how supply chain information is collected, assessed and managed. Under the new law, businesses will need to understand where products come from, how supply chains operate and whether they can demonstrate that products are both legally produced and free from deforestation. Businesses with established environmental and human rights due diligence processes will have a strong foundation, but many will still need to strengthen traceability, improve data collection and review the controls that underpin their sourcing decisions.
The European Commission has published detailed guidance to support implementation, as well as training materials on the EUDR, providing greater clarity on practical issues such as the respective responsibilities of operators and traders, the use of geolocation data, traceability requirements and the role of certification schemes. While the guidance does not change the requirements of the regulation, it provides greater insight into how businesses should approach compliance in practice. Understanding the requirements is only the starting point. Businesses will need effective systems, governance arrangements and supplier relationships to demonstrate compliance and manage supply chain risks effectively.
Why the EUDR matters
The EUDR forms part of a wider move towards mandatory supply chain due diligence. Regulators increasingly expect businesses to understand the environmental and social impacts associated with their supply chains and to demonstrate the steps they have taken to manage those risks.
The regulation builds on other similar legislation such as the US Lacey Act, which bans trade in illegally harvested plants and timber, and Australia’s Illegal Logging Prohibition Act which makes it a criminal offence to process or import illegally logged timber and requires structured due diligence from importers.
The UK Government has also announced plans to consult on proposals to introduce due diligence requirements for commodities linked to the risk of deforestation. While the proposed UK approach differs from the EUDR in scope and application, both reflect the wider expectation that businesses should have greater visibility of their supply chains and stronger processes for identifying and managing environmental risks.
Rather than creating separate compliance programmes for each new requirement, businesses should consider EUDR requirements alongside existing environmental and human rights due diligence processes, responsible sourcing programmes and supplier risk management systems. A consistent approach to supply chain risk management will help reduce duplication and improve the quality of decision-making.
Understanding the EUDR
First adopted in December 2022, the EUDR was introduced as a key part of the European Green Deal, with the aim of reducing the EU’s contribution to deforestation and promoting more sustainable supply chains and trade.
Since its adoption, implementation has been postponed twice. Most recently, the simplification review in April 2026 has also refined the scope of products covered and clarified how responsibilities are allocated across different actors in the supply chain.
The regulation requires that relevant commodities and their derivatives meet three core conditions before they can be sold into or exported from the EU:
1. Deforestation-free sourcing: Products must not originate from land deforested after 31 December 2020
2. Legal compliance: Commodities must be produced in accordance with the laws of the country where they originate
3. Due diligence reporting: Operators and certain traders must submit due diligence statements and simplified declarations on the EU TRACES platform explaining how their product complies with the EUDR’s requirements. The detail required in this due diligence statement depends on the size of the organisation involved and the level of risk assigned to the country of production, as determined by the European Commission
Products in scope
The regulation applies to seven key commodities:
- cattle
- cocoa
- coffee
- palm oil
- rubber
- soy
- wood
It also includes a wide range of derived listed in Annex I of the regulation. As such, businesses should not assume they are outside scope simply because they do not purchase raw commodities directly. Manufacturers, retailers, importers and distributors may all be affected where relevant commodities form part of their products.
Following the April 2026 simplification review, the list of products covered by the regulation was refined. Some derived products were removed from scope, including cattle hides, skins and leather, re-treaded tyres and certain treated rubber products. Other products, including soluble coffee, certain palm oil derivatives and frozen cattle tongues, were added. Full details of the products included or removed from scope can be found here and will be transposed to Annex I in due course.
Roles and responsibilities
The specific obligations an organisation faces under the EUDR vary depending on whether they play the role of an “operator” or a “trader” within the supply chain.
Operators are businesses placing relevant products on the EU market for the first time or exporting them from the EU. They are responsible for carrying out due diligence before products are placed on the market. This includes gathering the required information, assessing the risk of non-compliance and, where necessary, taking appropriate steps to reduce that risk, before finally submitting a due diligence statement through the EU TRACES system .
Traders sell or distribute relevant products that have already been placed on the EU market by another business. Their obligations differ from those of operators and vary depending on factors such as the size of the business and their position within the supply chain. Traders must collect and retain information about their direct suppliers and commercial customers. Where products are supplied by an upstream operator, traders must also retain the relevant Due Diligence Statement (DDS) reference numbers or declaration identifiers. Non-SME traders must register in the EUDR Information System, and all traders must notify the competent authorities if they become aware of information indicating that a relevant product may not comply with the regulation.
The April 2026 simplification review also introduced two additional categories of actor. Downstream operators are businesses placing on the market or exporting relevant products manufactured from materials already covered by a Due Diligence Statement or simplified declaration, while micro or small primary operators are small producers established in low-risk countries that benefit from simplified reporting requirements. These new categories are intended to reduce duplication of due diligence and clarify responsibilities across the supply chain.
Understanding the organisation’s role for each relevant product stream is therefore a critical first step.
Penalties for non-compliance
Non-compliance comes at a cost. The EUDR gives Member State’s wide-ranging enforcement powers, allowing authorities to investigate potential breaches and take action where businesses fail to comply. This includes recovering the costs of enforcement, seizing non-compliant products, suspending or prohibiting products from being placed on the market and requiring businesses to take corrective action.
Member States may also impose financial penalties. Where fines are imposed, the maximum penalty available must be at least 4% of the company’s annual EU-wide turnover. Authorities may also confiscate any revenues derived from non-compliant products. In addition, they are also empowered to conduct investigations into substantiated concerns or complaints raised by third parties.
To support transparency and enforcement, the European Commission will publish details of any company found to have breached the EUDR, including details of the infringements and the penalties imposed.
The implementation challenge
For many businesses, the hardest part of EUDR compliance will be operational rather than legal.
The regulation requires a level of supply chain visibility that many organisations have not previously needed. Companies sourcing through multiple intermediaries or global supplier networks may struggle to obtain accurate information about the origin of commodities and maintain reliable traceability.
Data quality will be a particular challenge. Information may come from different suppliers, systems and business functions, creating difficulties around verification, consistency and ownership. Businesses will need processes that allow them to link supplier information, geolocation data, risk assessments and compliance decisions.
Supplier engagement will also be critical. Compliance cannot be achieved through contractual requirements alone. Suppliers need to understand what information is required, why it matters and how expectations will be managed. Early engagement will be essential, particularly where suppliers require support to improve their own systems.
Responsibility for implementation is also likely to sit across multiple functions, including procurement, sustainability, legal, compliance and operations. Without clear ownership and coordination, businesses risk fragmented implementation and inconsistent decision-making.
The most effective approach will be to integrate EUDR requirements into existing supply chain governance and due diligence processes rather than treating them as a separate regulatory exercise.
Preparing for EUDR compliance
With the first compliance deadline of 30 December 2026 for large and medium-sized operators approaching, businesses in scope should now be moving from understanding their obligations to assessing whether they have the processes, systems and controls needed to meet the requirements.
The priority should be to establish where exposure exists, identify gaps in current arrangements and put in place the governance and supplier engagement processes needed to support effective due diligence.
Identify products and supply chains in scope
Businesses should begin by reviewing their product portfolios, sourcing arrangements and supply chains to identify where relevant commodities or derived products fall within scope. This assessment should determine which business units, suppliers and sourcing locations require further attention and clarify where the organisation acts as an operator, downstream operator or trader.
Understanding this exposure early will help organisations prioritise resources and focus effort on the areas where traceability or risk management challenges are likely to be greatest.
Assess existing systems and identify gaps
Many organisations will already have processes for responsible sourcing, supplier management or environmental and human rights due diligence. These should be assessed against EUDR requirements to determine whether they provide sufficient visibility, evidence and control.
Key questions include:
- Can the business obtain reliable geolocation data?
- Can supplier information be verified?
- Can the organisation demonstrate how risk assessments and compliance decisions were made?
- Can evidence be stored and retrieved when required?
Where information is currently held across different systems or business functions, organisations may need to strengthen data management processes to ensure that supply chain information, risk assessments and compliance decisions can be effectively linked.
Engage suppliers early
Obtaining the information required by the EUDR will depend heavily on supplier cooperation. Businesses should engage suppliers early to explain expectations, assess readiness and identify where additional support may be needed.
This is particularly important for complex supply chains involving multiple intermediaries, smaller producers or regions where traceability systems are less developed. Early engagement will help identify practical challenges and provide time to address information gaps before compliance deadlines become critical.
Establish clear governance and accountability
Effective implementation requires clear ownership across the business. Organisations should determine which functions are responsible for different aspects of compliance and ensure that procurement, sustainability, legal, compliance and operational teams are working together.
Senior management should have appropriate visibility of implementation progress, key risks and decisions where supply chain information is incomplete or risks cannot be adequately mitigated. Clear governance will be essential in demonstrating that due diligence decisions have been made consistently and proportionately.
Integrate EUDR into wider due diligence processes
The EUDR should not be treated as a standalone regulatory requirement. Businesses should consider how its requirements can strengthen existing environmental and human rights due diligence frameworks, supplier risk management processes and responsible sourcing programmes.
Building a consistent approach to supply chain due diligence will reduce duplication, improve risk management and help organisations respond more effectively to future regulatory developments.
Businesses that take such a structured approach will be best placed to meet the compliance deadline and manage the wider expectations around supply chain transparency and responsible sourcing.
How GoodCorporation can help
GoodCorporation helps organisations build effective systems for managing environmental, human rights and ethical risks across complex supply chains.
Our support includes assessing existing due diligence frameworks, identifying gaps against regulatory expectations and helping businesses strengthen governance, supplier engagement and risk management processes.
We work with organisations to:
- assess readiness against EUDR requirements;
- review supply chain risk management processes;
- strengthen supplier engagement approaches;
- evaluate traceability and evidence management systems;
- improve governance and accountability arrangements;
- provide independent assurance of due diligence processes.
The EUDR is part of a broader shift towards greater accountability for supply chain impacts. Businesses that invest now in effective due diligence systems will be better placed not only to meet current regulatory requirements but also to respond to future expectations around responsible sourcing.
Visit the Environmental Risk Management page of our website to find out more about our services or contact a member of our team.
work with us