EU deforestation regulation

Regulation (EU) 2023/1115 on deforestation-free products was adopted on 16 May 2023 and published on 9 June, with obligations applying from 30 December 2024. Operators must conduct due diligence, collect geolocation coordinates, and submit statements to the EU Information System before placing covered commodities or derived products on the market. This regulation represents the European Union's most ambitious effort to address imported deforestation, recognizing that EU consumption patterns drive forest loss in tropical regions through demand for commodities produced on recently deforested land. Organizations with supply chains touching covered commodities face full compliance obligations requiring significant operational changes.

Regulatory Context and Objectives

Deforestation and forest degradation contribute significantly to climate change, biodiversity loss, and ecosystem destruction globally. The European Union imports significant quantities of commodities produced in regions experiencing high deforestation rates, making EU consumption a driver of global forest loss.

The EU Deforestation Regulation addresses this impact by prohibiting placement on the EU market of relevant commodities and derived products that are not deforestation-free or were produced in violation of local laws. The regulation aims to reduce the EU's deforestation footprint while supporting sustainable production practices in source countries. Compliance creates significant supply chain visibility requirements that organizations must implement within the regulatory timeline.

Covered Commodities and Products

The regulation covers seven commodity groups and products derived from them: cattle and derived products including leather and meat, cocoa and chocolate products, coffee, oil palm and palm oil, soya and soy products, wood and wood products, and rubber. These commodities were selected based on their contribution to deforestation globally and the EU's role as a significant import market.

Derived products extend coverage beyond raw commodities to manufactured goods containing regulated materials, meaning producers of furniture, packaged foods, cosmetics, and many other product categories face compliance obligations. The Commission may expand commodity coverage through delegated acts as scientific understanding of deforestation drivers evolves.

Due Diligence System Requirements

Implement risk assessment, mitigation, and documentation workflows covering all relevant commodities and derived products in your supply chain. Due diligence systems must gather information identifying products, quantities, countries of production, and geolocation of production plots.

Risk assessment must evaluate the likelihood that products are non-compliant based on country risk, supply chain complexity, and supplier-specific factors. Risk mitigation measures must address identified risks through improved verification, supplier engagement, or supply chain restructuring. Documentation must show that due diligence was exercised appropriately, supporting regulatory verification and enforcement activities.

Geolocation Data Requirements

Capture precise plot-level coordinates for relevant production areas and ensure traceability to the farm or plantation level. Geolocation requirements enable verification that production occurred on land that was not forested after the cutoff date of 31 December 2020. Coordinates must be sufficiently precise to identify the specific plot where production occurred, enabling satellite monitoring and verification.

For large plantations, polygon data delineating the production area may be required. Supply chain traceability systems must link geolocation data through processing, trading, and manufacturing stages to final products placed on the EU market. Technology solutions including satellite imagery analysis, mobile data collection, and blockchain traceability are emerging to support these requirements.

Information System and Statement Submission

Prepare to lodge due diligence statements with the EU Information System before customs clearance for products entering the EU market. The Information System will enable operators to submit required statements and help competent authority verification. Statements must certify that products are deforestation-free, were produced legally, and were subject to due diligence. Reference numbers from the Information System will be required for customs clearance, integrating deforestation compliance into trade facilitation processes. If you are affected, monitor Information System development and prepare integration with their trade compliance and supply chain management systems.

Risk-Based Enforcement

Monitor Commission risk benchmarking that will categorize countries as low, standard, or high risk, triggering differentiated due diligence requirements. High-risk country sourcing requires improved due diligence and may face more intensive verification by competent authorities. Low-risk country sourcing may qualify for simplified due diligence procedures. Country risk classifications will be based on deforestation rates, production practices, governance indicators, and enforcement effectiveness. If you are affected, anticipate that significant production regions will initially receive standard or high-risk classifications requiring strong due diligence programs.

Implementation Planning

Deploy traceability platforms capable of capturing geospatial data and satellite verification for supply chain visibility. Integrate deforestation risk assessments into procurement approval processes. Secure contractual commitments, data sharing agreements, and remediation expectations from upstream suppliers. Coordinate with customs brokers to align on statement submission workflows. Maintain due diligence records for at least five years, including geolocation data, supplier declarations, and mitigation actions taken.