EUDR: Unveiling Myths & Reality
Let’s break down the common misunderstanding to reach clarity.
The European Union Deforestation Regulation (EUDR) has sparked numerous discussions and raised concerns across industries, governments, and civil society.
As with any significant regulatory change, misconceptions and misunderstandings have emerged, leading to uncertainty about its actual impact. While some believe that EUDR imposes excessive restrictions on farmers, creates unnecessary bureaucratic hurdles, or disrupts trade, the reality is that the regulation is designed to ensure sustainable supply chains while balancing economic and environmental priorities.
Introduction
The core objective of EUDR is to prevent deforestation and forest degradation by requiring companies to trace the origin of key commodities and ensure they are sourced responsibly. Contrary to some claims, the regulation does not target specific countries or sectors unfairly, nor does it impose unattainable demands on small farmers or businesses. Instead, it provides flexibility, digital tools, and transitional support to help stakeholders comply with its requirements. Additionally, the EU has put financial and technical support programs in place to assist smallholders and partner countries to adapt to these changes.
This article pivots on the latest guidelines from the EU Commission addressing the most common myths and misconceptions surrounding EUDR and provides factual clarifications to ensure a well-informed discussion. By distinguishing between speculation and reality, it aims to offer a clearer understanding of how the regulation operates, its intended benefits, and the mechanisms in place to facilitate compliance.
After the EUDR postponement became law in late 2024 and the EU announced imminent simplifications of some due diligence legislations, the EUDR’s fate was unclear. With this new resource, the EU Commission is showing its commitment and dedication to breaking down EUDR complexity and facilitating its adoption across all member states and international stakeholders.
The following sections break down key claims about EUDR and present the actual provisions of the law, demonstrating that the regulation fosters sustainability without imposing disproportionate burdens.
In general, the message from the EU Commission could be summarised as follows:
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Myths vs. Reality: Bureaucracy & Costs
The EUDR means endless paperwork.
Reality: EUDR’s logic is that companies must have clear traceability of all production sites along the supply chain to ensure they avoid deforestation and forest degradation. That is why they are required to submit due diligence statements with incorporated geolocation data, which can sometimes be troublesome to acquire.
However, due diligence processes are fully digital, reducing substantially the administrative burden and increasing efficiency. Companies submit their statements electronically through theEU Information System, where they will be available for being scrutinised by competent authorities.
This system will be directly accessible through an API (Application Programming Interface), allowing businesses to integrate their existing databases and automate submissions of the due diligence statements, instead of relying on its standard web version and uploading the data manually.
In addition, companies can also reuse previously submitted information that has been previously submitted to the EU Information System, eliminating unnecessary duplication.
The EU digital Information System is not ready.
Reality: The rollout of the EU Information System is on track:
- December 2024: The system was launched as scheduled.
- January 2024: 100 companies participated in testing.
- May 2024: The Integration to the Information System through an API was made public, enabling automated submissions of the due diligence statements.
- August 2024: Businesses could test geolocation files with the EU IT service to prove their compatibility.
- Training sessions are being organised for competent authorities, so that they can conduct separate training at the national level.
- The Commission’s webpage dedicated to the EU Information System has been modified with the latest information and structured to be as accessible as possible to global stakeholders. On top of that, online tutorials have been provided to help companies navigate the system.
Benchmarking is delayed, which will disrupt trade.
Reality: The risk classification list will be published before the regulation’s full implementation. The latest amendments from December 2024 confirmed that the benchmarking system must be in place before June 30, 2025, for EUDR to come into force from December 30, 2025. The process is well underway, ensuring businesses and trading partners have clear guidance ahead of time.
There’s no funding to implement the EUDR.
Reality: Financial and technical resources have been put in place to support implementation and monitoring. EU Member States are establishing national frameworks for enforcement, ensuring regulatory authorities have the necessary tools.
The EU has committed around €80 million through the Team Europe Initiative and the SAFE Programme to assist businesses, especially smallholders, in transitioning to deforestation-free supply chains. Additionally, €1 billion has been pledged at COP26 for global forest protection and restoration.
Other initiatives involve the LIFE Programme, through which the EU will also finance the necessary resources for capacity building and training of European stakeholders, and the Forest Partnerships, a tool fostering forest development cooperation that will be lowered to country-based needs.
Myths vs. Reality: Global Impacts
The EU is overstepping its authority by regulating legal deforestation.
Reality: Addressing only illegal deforestation would be ineffective. According to the impact assessment compiled by the EU Commission, many countries legally allow forest clearance for agricultural expansion, which could lead to a “race to the bottom,” where countries may be inclined to weaken environmental protection measures to ease trade access.
The effects would be both detrimental, due to EUDR’s intrinsic objectives of protecting nature and biodiversity, and discriminating, because it would have benefited those countries willing to go the extra mile in sacrificing their environment for commercial advantages.
Since global supply chains are interconnected, regulations in one region can help protect ecosystems worldwide. Being one of the main consumption drivers, the EU has the right and duty to set sustainability standards for products entering its market, ensuring compliance with global climate and biodiversity commitments.
Partner countries have been actively engaged in discussions about EUDR implementation, for example via the Multi-Stakeholder Platform on Protecting and Restoring the World’s Forests.
The EUDR discriminates and creates trade barriers.
Reality: The regulation is based on the principle of non-discrimination and applies equally to products whose production was proved to be the leading cause of EU-driven global deforestation, whether they have been produced inside and outside of the EU, as well as to both EU-based and non-EU companies placing their products in the EU market. It also does not target specific nations or industries and does not force a trade ban on any country or commodity.
The EU’s approach ensures that the regulation aligns with global sustainability commitments and that protection measures do not result in unfair trade restrictions. In particular, EUDR was designed in accordance with World Trade Organisation (WTO) principles to ensure it does not discriminate in any way against international trade partners. Once again, the EU Commission offers its unwavering support to address any concerns from stakeholders.
The EUDR will cause supply shortages and price hikes.
Reality: If properly implemented, the EUDR-compliant traceability system can bring more benefits than costs to businesses. The regulation aligns with best practices already in place, and companies have transition periods to adapt, with extended timelines specifically designed for small businesses.
Enhanced traceability improves supply chain transparency and may reduce the number of intermediaries. Geolocation data is easy and free to obtain using widely available ready-to-use technology and requires only a one-time setup.
Studies show that the economic benefits of compliance far exceed the costs, particularly due to the competitive advantages gained in a market where consumers increasingly prioritise ethical and sustainable products. Additionally, compliance leads to significant cost savings by reducing expenses associated with greenhouse gas emissions.
The risk classification system unfairly targets some countries.
Reality: The system applies equally to EU and non-EU countries, using objective, science-based criteria to classify risk levels. Also, no country or region is automatically restricted from selling products to the EU.
Low-risk areas benefit from simplified due diligence, meaning that they will still have to comply with basic EUDR requirements, while high-risk regions face additional scrutiny. Countries with higher risk classifications will have the possibility to engage in discussions with the Commission to address deforestation concerns and mitigate the related risks.
EUDR will disrupt global supply chains.
Reality: The regulation primarily affects land deforested after December 31, 2020, meaning the vast majority of agricultural production remains compliant. The EU is working with businesses and Member States to ensure smooth implementation and address concerns from industry organisations. This includes setting up guidance documents, an FAQ section, and digital tools to simplify compliance.
The system is designed to minimise administrative burdens as entails a centralised registry, while allowing for integrations via API and information sharing.
Myths vs. Reality: Small-holders
The EUDR will harm small businesses.
Reality: SMEs benefit from lighter compliance requirements, a preparation period extended by 6 months, and exemptions from annual reporting. Smaller traders do not need to conduct due diligence if their suppliers have already done so. The regulation specifically accommodates SME operators in sectors like timber, who have already been following similar due diligence obligations under EU law for years under the EU Timber Regulation.
Small farmers in developing countries will suffer under the EUDR.
Reality: Smallholders outside the EU have no direct legal obligations but can access a range of benefits.
EUDR’s responsibility falls on importers and companies placing products on the market. Farmers only need to provide basic geolocation data, which can be collected with free mobile technology.
In fact, the EUDR could strengthen smallholders’ market position by increasing transparency and independence along the value chain, potentially leading to fairer prices and new business opportunities. The EU has dedicated funding (the previously mentioned Team Europe Initiative and the SAFE Programme) to help small farmers comply and reach deforestation-free supply chains. According to a publication from the EU Commission, they could also be able to strengthen the protection of the natural environment they live and work in.
Myths vs. Reality: Agriculture & Land Plots
A farmer is not allowed to cut down and sell their own trees.
Reality: Most farms are considered agricultural land and are therefore outside the scope of the EUDR.
The regulation generally does not restrict farmers from cutting down trees on their land. If a section of a farm qualifies as a forest (over 0.5 hectares and meeting specific conditions), tree harvesting is still permitted as long as the forest is not degraded and is allowed to regenerate.
On top of that, farmers only have obligations under the EUDR if they directly place regulated products on the market. The directive is designed to encourage responsible and legal forestry management rather than hinder it.
Every single coffee bean must be traced back to its source.
Reality: The EUDR does not require tracking each individual product to a specific plot of land. Given the complexity of supply chains, it is common that products from various locations are often combined.
The regulation allows for “aggregated traceability,” meaning companies can report all sourcing areas collectively, even if they cannot assign specific products to individual plots. If only part of a shipment is placed on the market, businesses can “declare in excess” to ensure compliance.
Also, if for any reason the assessed raw materials are not completely consumed for the specific shipment, they can be used for new shipments, without requiring additional risk assessments. Only new raw materials will need a risk assessment. All this said, mixing compliant goods with those of unknown or non-compliant origin is not allowed.
Agroforestry and sustainable farming will be non-compliant under EUDR.
Reality: Environmentally friendly agroforestry and farming are not affected by the regulation. The FAO classifies agroforestry as agricultural land rather than forest, meaning it is not subject to deforestation rules under the EUDR. Similarly, oil palm plantations and other agricultural areas are considered farmland, not forests.
Environmentally friendly farming practices are encouraged, for instance, integrating trees into farmland or creating grazing areas do not qualify as “forest,” therefore these cases are not required to be compliant with the directive.
Conclusions
Wrapping up, the EUDR is a crucial step toward ensuring global supply chains are free from deforestation and forest degradation. While initial concerns and misconceptions have led to debates about its impact, the regulation is designed to be both effective and practical. By providing digital tools, flexible compliance options, and financial support for smallholders, the EU aims to strike a balance between environmental responsibility and economic feasibility.
As EUDR moves forward, collaboration among governments, businesses, and stakeholders will be key to its success. By embracing transparency and sustainable sourcing practices, companies can not only meet regulatory requirements but also gain a competitive edge in a market that increasingly values responsible production. The transition may require adjustments, but in the long run, EUDR paves the way for a more sustainable and resilient global trade system.
