Policy Briefing — July 2, 2025
Micro and small operators lose their EU deforestation-regulation grace period on 1 July 2025, so they need geolocation-backed due diligence statements, risk grading, and customs reporting ready for competent authority reviews.
Executive briefing: From 1 July 2025, micro and small operators benefit from the six-month deferral built into the EU Deforestation Regulation (EUDR) expire and they must meet the same due diligence obligations as larger companies when placing covered commodities (soy, beef, palm oil, coffee, cocoa, rubber, and derived products) on the EU market or exporting from the Union. Competent authorities will expect traceability to the plot of land, geolocation verification, risk assessments, mitigation measures, and due diligence statements filed in the EU Information System. This briefing outlines the governance, evidence, and reporting infrastructure small operators need to prove compliance.
Governance structure and accountability
Establish a governance framework that assigns board-level responsibility for EUDR compliance, ideally through the sustainability or risk committee. Appoint an EUDR compliance officer with authority over procurement, logistics, and data management. Document cross-functional working groups covering sourcing, legal, IT, and external partners. Record meeting minutes, decision logs, and resource allocations to demonstrate top-level oversight.
Traceability and data management
Small operators must collect geolocation coordinates for every farm or plot supplying EUDR commodities. Build a master data repository capturing supplier identities, coordinates, production volumes, land use history, and risk indicators. Implement GIS tools capable of checking plots against deforestation alerts, protected areas, and Indigenous territories. Maintain data dictionaries, access controls, and change logs. Where supplier data is incomplete, document remediation plans and escalation routes.
Risk assessment methodology
Develop a written risk methodology aligning with EUDR Article 10. Combine country risk classifications with subnational factors, satellite analysis, certification status, and supplier performance. Score risks for deforestation, forest degradation, legality, and human rights impacts. Record the rationale for each rating, data sources used, and thresholds that trigger mitigation or suspension. Provide the board with quarterly risk heat maps and trend analysis.
Mitigation measures and action plans
If non-negligible risk is identified, operators must implement mitigation before placing products on the market. Document mitigation options such as supplier audits, satellite monitoring, remediation commitments, diversification, or exclusion. Maintain action plans with timelines, responsible owners, verification evidence, and closure status. For high-risk suppliers, capture photographic evidence, third-party audit reports, and contractual amendments reflecting EUDR clauses.
Due diligence statements and reporting workflow
Prepare to submit due diligence statements through the EU Information System before customs or placing goods on the market. Create standard operating procedures covering data validation, document assembly, and sign-off. Automate population of statements from the traceability database where possible. Track submission IDs, timestamps, and confirmation receipts. Maintain a log of statements for audit purposes, linked to shipping documents and commercial invoices. Ensure staff are trained to handle system outages and contingency filing methods.
Supplier engagement and contracts
Update supplier contracts to include EUDR clauses on traceability, data sharing, deforestation-free commitments, remediation cooperation, and audit rights. Develop supplier onboarding packs with training materials, geolocation templates, and FAQs. Run webinars and field visits to support smallholder compliance, documenting attendance and feedback. Maintain escalation procedures for suppliers unwilling or unable to provide required data.
Technology and satellite monitoring
Deploy satellite monitoring or third-party verification platforms that provide alerts on land use change. Integrate alerts into risk management workflows, triggering investigations and supplier engagement. Document system configuration, data refresh frequency, and exception handling. Store evidence of investigations, including geospatial analysis, photos, and correspondence.
Evidence pack and audit readiness
Competent authorities may conduct inspections with little notice. Build an evidence room containing governance documentation, risk methodologies, traceability data extracts, due diligence statements, supplier audits, and mitigation records. Include logs of system access reviews, data quality checks, and corrective actions. Provide indexes mapping EUDR requirements to evidence items. Keep records in EU languages relevant to competent authorities.
Interaction with other regulations
Align EUDR controls with existing sustainability and compliance frameworks such as the EU Corporate Sustainability Due Diligence Directive (CSDDD), national deforestation laws, and voluntary certification schemes. Document how traceability data feeds sustainability reports, ESG investor disclosures, and customer communications. Ensure messaging remains consistent across regimes and that data integrity is maintained.
Internal assurance and independent verification
Schedule internal audits focused on traceability completeness, risk assessment quality, and statement accuracy. For critical supply chains, commission third-party audits or satellite verification and document scope, methodology, and findings. Track remediation of audit observations. Report assurance outcomes to the board committee overseeing EUDR compliance.
Incident response and escalation
Develop an incident management plan for suspected non-compliance, including immediate suspension procedures, legal review, and stakeholder communications. Record incidents in a central register detailing discovery method, impact assessment, corrective action, and reporting to authorities if required. Prepare template notifications for customers and competent authorities.
Training and capacity building
Deliver training modules for procurement teams, logistics staff, and leadership on EUDR obligations, data collection standards, and escalation criteria. Track attendance, comprehension testing, and follow-up coaching. Provide guidance to smallholder suppliers on GPS capture, documentation, and continuous improvement.
Next steps before July 2025
Complete supplier mapping, risk scoring, and data quality remediation by May 2025. Conduct a dry run of due diligence statement submissions in June, including contingency procedures. Secure board sign-off on the governance framework, residual risk acceptances, and resource plans. After go-live, monitor enforcement actions and update controls accordingly, maintaining a continuous improvement log.
Customer and investor communications
Retailers and downstream customers will request assurance that small operators meet EUDR standards. Prepare customer briefing packs summarising governance, traceability coverage, and grievance mechanisms. Maintain template representations and warranties for contracts, alongside evidence supporting claims of deforestation-free sourcing. Track investor and lender inquiries, documenting how EUDR compliance features in sustainability-linked financing covenants.
Financial planning and cost management
Compliance requires investment in technology, training, and supplier engagement. Build a cost tracker covering system licenses, satellite subscriptions, audits, and remediation activities. Present budget updates to the board, linking expenditure to risk reduction outcomes. Evaluate funding opportunities, such as blended finance or producer support programmes, and document decisions.
Data retention and privacy considerations
Traceability data may include personal information about smallholder farmers. Implement GDPR-compliant data retention schedules, consent records, and security controls. Document how data subjects can access, correct, or delete information, while maintaining the records necessary to meet EUDR obligations. Coordinate with privacy officers to align governance across jurisdictions.
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