Businesses should act as EU and UK deforestation rules loom

This approaching milestone, which concerns the EU Deforestation Regulation (EUDR), should prompt businesses to consider whether their operations are in scope and, if so, prepare to meet new obligations around supply chain mapping, due diligence, and reporting.

The actions international businesses take now could also help them address sister requirements set to be introduced in Britain, under plans set out by the government just last week.

What is the EUDR?

In brief, the EUDR requires in-scope companies to conduct due diligence on commodities such as cattle, cocoa, coffee, palm oil, rubber, soya and wood, and certain related products. This requires information collection, risk assessments, risk mitigation and the submission of due diligence statements to a central EU system. Products which have not been subject to that due diligence and which are not covered by a due diligence statement must not be placed on the EU market. 

What is proposed in the UK?

New deforestation regulations are also set to enter into force in the UK.

In respect of England, Scotland and Wales, the UK government confirmed on 23 June 2026 that it intends to implement a new due diligence regime for forest risk commodities in 2027. That regime will be applicable to businesses with a turnover greater than £1 million using forest-risk commodities and wood products and will largely mirror the EUDR in terms of commodities and derived products in scope and the requirements relating to them.

The government said it plans to consult businesses on the substance of its proposals. It said: “Businesses who use these products would need to ensure they establish a due diligence system, report on their activity, and hold proof of this compliance by collecting geolocation data about the origin of the specific products.” 

In Northern Ireland, the EUDR will apply directly in phases from 30 December 2026. Alignment with the EU regime in Northern Ireland aims to reduce trade friction but increases compliance complexity for businesses in the rest of the UK.

Required actions

Ahead of the EUDR entering into force, it is essential companies understand their compliance obligations and put in place measures to ensure continued market access from 30 December. 

In advance of that deadline, businesses should: 

• Determine whether they are in scope – either as an operator or trader – and what their corresponding obligations are. Traders have lighter due diligence obligations but operators misclassifying themselves as traders will be in significant breach. Correct classification within corporate groups can be challenging. It is also possible for companies to be both operators and traders depending on their products and supply chains; 

• Identify in-scope products. While the list of commodities is easy to understand, the list of derived products is detailed and can be subject to interpretation; 

• Map their supply chain to the plot level with geo-location data. The EUDR requires businesses to be able to provide polygon or point geo-location data for every plot of land where the commodity was produced; 

• After collecting supply chain data, assess the deforestation risk associated with their sourcing; 

• Take mitigation steps where risk assessments identify anything other than negligible risk. These may include renegotiating supplier contracts, switching sourcing regions, requesting additional supplier-level documentation, or commissioning independent audits; 

• If an operator is expected to submit due diligence statements through the EU's information system, ensure they understand the technical requirements for submission and that their internal systems are capable of generating the necessary data outputs. Incomplete or inaccurate statements can carry legal exposure. 

Implementation of the EUDR was delayed for two years amidst concern from industry and lawmakers about the regulatory burdens it would introduce on businesses. In the interim, EU lawmakers adopted a package of measures to simply the requirements. It is this streamlined regime that will come into force on 30 December.

Companies that undertook some implementation activities under previous iterations of the EUDR should be aware of the material changes the legislation brings. For other businesses, there is a need to get up to speed quickly now.

A consequential change is the differentiation between the obligations of operators and ‘downstream operators’, which requires businesses to reassess whether, and if so how, they fall in scope. There is also a reduction in obligations of downstream operators and traders when compared with operators. A three-tier country benchmarking system was confirmed too: companies sourcing from low-risk jurisdictions can benefit from substantially simplified due diligence obligations, while full due diligence obligations apply to standard-risk countries and enhanced due diligence requirements – including more intensive verification – apply to high-risk countries. 

In addition to practical challenges, such as supply chain opacity, data quality, information system interoperability among others, there remain points of legal uncertainty. These include to what extent operators must verify compliance with “relevant legislation” in the country of production and whether there might be divergence in enforcement practice across EU member states. 

The EUDR represents a genuine compliance challenge for businesses. There will need to be cross-functional input to prepare in time: resolving uncertainty and compliance models in the near future will support efficient delivery for December and avoid market access consequences. 

In relation to the UK government’s announcement, this marks a shift from voluntary commitments to enforceable supply chain obligations. The change was provided for in the Environment Act 2021 and reflects a commitment the government made at COP26 to decouple UK consumption from global deforestation. 

For businesses, a commercial implication is the convergence of the proposed new British regime with the EUDR, especially given its direct application in Northern Ireland. This creates a quasi-dual regime, where businesses must navigate both UK-specific rules and EU-aligned requirements. The proposed due diligence threshold – for companies with turnover over £1m – reflects a broad scope, potentially capturing a wide range of mid-market operators.