FAQs Explained: EUDR Scope (3rd ed.)

Introduction

The 56 new questions of the 3rd edition make the total number reach 130 questions, and the next version is going to be even more packed with insights and in-depth answers. The 4th edition, expected to come in April 2025, will clarify SME requirements, timeframes, customs representatives, online commerce, IT updates, and upstream due diligence. This time around, it is also planned to be translated into Spanish.

In a past article, we already discussed the meaning of the EUDR FAQs concerning traceability and geolocation, in particular on how bulk-traded and composite products are handled, the requirements for geolocation data submission, and interesting exceptions to the general rules. and geolocation.

Many questions have arisen also regarding what counts as “supplying” a product on the market, and when companies must conduct due diligence and submit a Due Diligence Statement (DDS).

In this post, we will break down these concepts in a clear and accessible way, providing real-life examples to help you better understand your responsibilities under the EUDR. We quote the original questions as they appear in the FAQ document to ensure you can easily recognise them. Get ready to buckle up because we’re about to dive right in!

Understanding EUDR: The Regulation’s Scope

2.6. Would the return of a relevant empty packaging by the retailer to its supplier be considered ‘making available on the EU market’ when the concerned packaging was placed on the EU market in its own right (i.e. standalone packaging) prior to the return? (NEW)

The packaging in question is presumed to be made of paper, one of the relevant products identified under Annex I of the EUDR (HS code: 4421). Nevertheless, the EUDR applies primarily to commodities and products from a commercial standpoint.

Therefore, if the packaging in question is placed on or made available on the market or exported independently, which means it is a distinct product itself rather than merely a packaging for another item, it falls under the Regulation, and the applicable due diligence obligations must be met (refer to question number 2.5).

On the other side, if the packaging is subsequently used solely as material intended to contain, protect, or transport another product, it no longer falls within the scope of the Regulation.

For example, if a company sells paper packaging directly to customers who then sell ceramic home decoration items, that company must complete and submit a due diligence statement for the packaging. However, the customers who use the packaging solely to wrap and deliver their ceramic products are not subject to the EUDR.

2.7. Does trading with relevant second-hand products on the EU market fall in the scope of the Regulation? (NEW)

No. Used products that have reached the end of their useful life and would normally be discarded as waste (as referenced in Recital 40 and Annex I) fall outside the scope of the obligations imposed by this Regulation.

2.10. When is there a “supply” of a relevant product, meaning it is placed or made available on the market in the course of a commercial activity? To what extent are companies in scope when they use relevant products in their own business or process them (NEW)?

Under the EUDR, a product is considered “supplied” when it is either placed on the EU market or made available during a commercial transaction between legal or natural persons. This applies whether the product is produced within the EU or imported from outside.

To count as a supply, there must be an agreement—either verbal or written—between two or more parties that involves a transfer of ownership or similar rights (such as through a sale or trade). Moreover, the product must be either manufactured (if processed) or produced (if raw or unprocessed).

Important: The supply doesn’t have to be for resale. Even if a product is used by the buyer in their own business operations, it’s still considered placed on the market.

However, in the case of relevant products and commodities placed under customs procedure “release for free circulation” which are not expected to be used or consumed privately, EUDR directly assumes them as being placed in the market, regardless of the presence of a “supply” as defined above, or of a commercial agreement.

Who is responsible?

The key factor is whether your business is the first one placing a relevant product on the EU market. If so, you are considered an “operator” under the EUDR and must conduct due diligence.

Those who buy relevant products that have already been placed on the market by someone else (and who have already fulfilled due diligence) are considered “traders” and typically have fewer obligations, unless they re-supply the product.

Entities that simply handle or transport the product (such as freight or customs agents) without taking ownership are not considered operators or traders under the EUDR.

Real-World Examples: When Is a Company In Scope?

Let’s look at some practical scenarios that illustrate when a company is or isn’t considered an operator:

Example 1: Car Manufacturer Buying Leather

• Scenario A: Company A buys leather (a relevant product) from an EU tannery to make car seats. Company A’s finished product – a car – is not a relevant product, i.e. it does not appear in Annex I of EUDR official text. Because the leather isn’t sold separately, Company A is not an operator under the EUDR.
• Scenario B: Company B imports leather directly from a third country in the EU market. In this case, Company B is placing a relevant product on the EU market, qualifies as ‘operator’ and must perform due diligence and submit a DDS.

Example 2: Farmer Using Soybean Meal

• Scenario A: Farmer A buys soybean meal (a relevant product) from an EU supplier and uses it to feed chickens (a non-relevant product). He then sells the chickens. Since he’s not reselling the soybean meal, Farmer A is not an operator.
• Scenario B: If the farmer imports the soybean meal himself, he becomes an operator and must comply with the EUDR.
• Scenario C: If the farmer uses soy to feed cattle (a relevant product), specific rules apply (see Recital 39 of the EUDR).

Example 3: Furniture for Internal Use

• Scenario A: Company C imports wooden furniture for its office staff. Even though the furniture isn’t resold, Company C is an operator because the products are relevant and being placed on the market for the first time.
• Scenario B: If Company C buys the same furniture from an EU importer who has already completed due diligence, and only uses the furniture internally, Company C is not an operator and is not required to conduct due diligence.

Example 4: Farmed Products Used or Sold

• Scenario A: Farmer B grows soybeans and processes them into soy flour, which he uses to feed animals on his own farm. Since he isn’t selling the soy or soy flour, he isn’t placing it on the market and isn’t an operator.
• Scenario B: If the same farmer sells the soy flour to another farmer, he becomes an operator with responsibility under the EUDR.

Example 5: Wood for Energy

• Scenario A: Company D processes its own harvested wood into wood chips to heat its buildings. No supply on the market occurs, so company D is not an operator.
• Scenario B: Company E buys wood chips from an EU importer and uses them for fuel. Again, if no resale occurs and the wood chips were not imported for the first time, company E isn’t an operator.
• Scenario C: Even if Company E uses the chips to generate electricity, as long as the wood chips aren’t placed on the market again, the EUDR doesn’t apply.

2.11. When is there a need to exercise due diligence and submit a DDS if the same natural or legal person processes a relevant product multiple times in the course of their commercial activity (NEW)?

If a company processes a relevant product multiple times before finally selling the end result, due diligence is only required before placing the final product on the market.

Let’s give you an example. A non-SME chocolate maker buys cocoa beans (relevant product), processes them into cocoa powder (also relevant), then uses that to make chocolate bars (still relevant). The company only needs to perform due diligence before placing the chocolate bars on the market.

However, if the company were a Small or Medium Enterprise (SME), it wouldn’t need to do its own due diligence if its supplier had already done it. In that case, the SME would only need to store the DDS reference number.

2.12. Is bamboo in scope of the EUDR? What about other products that do not contain or have been made using relevant commodities, but that are listed in Annex I (NEW)?

This question comes up frequently. The answer is no—bamboo is not in scope of the EUDR. Although some products made from bamboo share the same customs (HS) codes as wood products listed in Annex I of the Regulation, bamboo itself is considered a “non-wood forest product” according to FAO guidelines.

That means if a product is made solely from bamboo, it’s not considered to be made from a relevant commodity and does not fall under the EUDR. If a product is made of a first component being bamboo and a second component being another wood species, then the company must conduct due diligence only on the second component.

Key Takeaways for Businesses

• You are an operator under the EUDR if you are the first to place or import a relevant product into the EU market, even if it’s for your own internal use.
• You must conduct due diligence and submit a DDS for every relevant product you import or place on the market for the first time.
• Processing a product internally does not create new obligations unless the final relevant product is placed on the market.
• Bamboo products are not subject to the EUDR unless they also contain wood or another relevant commodity.

Understanding these nuances is critical for ensuring compliance with the EUDR. By applying the correct definitions and evaluating your business activities carefully, you can avoid penalties and contribute to a more sustainable supply chain.

If you’re unsure whether your product or activity falls under the EUDR, it’s always best to consult legal or regulatory experts or reach out to your competent national authority.

Have more questions about EUDR obligations? Stay tuned for more blog posts in this series, where we’ll dive deeper into traceability, deforestation-free sourcing, and risk assessment techniques.