EUDR: The EU Regulation on Deforestation-Free Products – New Developments in the Coalition Agreement
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Recent updates in the coalition agreement have brought clarity for Germany on how the EU Regulation on deforestation-free products (EUDR) will be implemented. According to the agreement, products made in Germany that can be proven to come from deforestation-free supply chains may be exempt from some of the usual verification requirements, which could make things easier for companies producing locally.
That said, the main requirements of the EUDR still stand. Businesses trading in palm oil, beef, soy, coffee, cocoa, wood, rubber, or products made from these within the EU must continue to ensure their supply chains are:
- Free from deforestation (no clearing after 31 December 2020),
- Fully compliant with the laws of the country where they come from, and
- Traceable through precise geographic details of where the crops were grown.
Risks Not to Be Overlooked
While the coalition agreement may ease rules for certain countries of origin, complying with the EUDR remains essential to access the EU market. Companies that rely solely on national laws risk:
- Fines for breaking EUDR rules,
- Delays in their supply chains due to missing documentation, and
- Damage to their reputation if they cannot guarantee deforestation-free standards.
Why Does the EUDR Matter and What’s In It for Businesses?
Managing Risk: The EU uses a benchmarking system that rates country risks as high, medium, or low. Companies with transparent, sustainable supply chains reduce financial risks linked to climate change or changing regulations and avoid fines, supply delays, and damage to their reputation.
Protecting Climate and Biodiversity: Around 90% of deforestation is caused by agricultural clearing. Forests play a vital role in absorbing CO₂, regulating water cycles, and protecting wildlife. Deforestation-free supply chains help tackle climate change and give companies a competitive edge as transparency and demand for sustainable products grows.
Global Responsibility: The EUDR sets mandatory due diligence requirements and is a must for businesses wanting to trade within the EU. Those who meet these rules stay competitive and safeguard their market share in the long run.
What Does This Mean for Companies?
To comply with the EUDR, businesses need to:
- Gather data, including proof of origin for products and raw materials.
- Carry out risk assessments to identify and manage potential issues.
- Submit due diligence statements confirming products are deforestation-free and legally compliant before trading within the EU.
How phiyond Can Help
With the coalition agreement’s developments and the EUDR’s requirements in mind, phiyond supports businesses in keeping up with political changes and responding strategically. Get in touch with us for a free consultation.