EUDR and Timber: Requirements, Obligations, and Implementation for Businesses

The new EU Deforestation Regulation (EUDR) is changing supply chain requirements for raw materials worldwide. Wood and wood-based products are particularly affected. Companies that import, manufacture, or trade in wood or wood products into the EU will in the future be required to demonstrate that these products are not linked to deforestation. The regulation affects thousands of companies in Europe, ranging from furniture manufacturers and paper producers to trading companies.

What is the EUDR?

The EU Deforestation Regulation (EUDR) is an EU regulation designed to combat global deforestation and forest degradation. It requires companies to ensure that certain raw materials do not come from deforested areas.

The regulation was introduced because a significant portion of global deforestation is caused by the international trade in raw materials.

The EUDR applies to the following raw materials:

• Wood
• Soy
• Coffee
• Cocoa
• Palm oil
• Beef
• Rubber

Companies may sell or export these products in the EU only if they can demonstrate that they:‍

1. produced without deforestation
2. were legally manufactured
3. are documented in a due diligence statement

Why wood is a particular focus of the EUDR

Wood is one of the most important raw materials in international trade and is used in numerous industries. At the same time, wood production is a major driver of deforestation in many regions of the world.

Typical industries with wood supply chains include:

• Furniture industry
• construction industry
• Paper and Pulp Industry
• Packaging industry
• Retail
• Import and trading companies

Many companies underestimate the fact that processed wood products may also fall under the EUDR.

Examples:

• Wooden pallets
• Furniture
• Wooden packaging
• Wood components in products

Which wood products are covered by the EUDR

The regulation defines the products covered using so-called HS codes (Harmonized System codes).

The most important wood products include:

• Roundwood
• Sawn timber
• plywood
• Veneers
• Wooden panels
• Furniture

Companies must verify whether their products fall under the affected tariff codes. In many cases , not only raw materials but also processed products are affected.

Which companies are affected by the EUDR

In general, the EUDR distinguishes between two roles:

Primary Operators

Primary operators are the first to place affected products on the EU market or export them.

Examples of primary operators:

• Wood Importer
• Furniture manufacturers using wood as a raw material

Primary operators bear full responsibility for the due diligence review.

Retailer

Trader

Distributors resell products within the EU. They are one step behind the primary operator in the value chain.

Their responsibilities are somewhat less extensive, but they must also:

• Document supply chains
• Save information
• Ensure traceability

What data companies must collect for wood supply chains

A key component of the EUDR is full traceability of the supply chain back to the forest area.

Companies must collect the following information:

geolocation data

• exact coordinates of the forest area
• Size of the cultivated area

This data is crucial for determining whether the area was deforested after December 31, 2020.

Supply Chain Information

Companies must document all parties involved in the supply chain:

• Producers
• Retailer
• middleman
• Processor

Production data

In addition, information is required regarding:

• Product Type
• Country of origin
• Amount of raw materials

Proofs of legality

Companies must demonstrate that the raw material was produced legally in the country of origin, for example by:

• Permits
• local environmental regulations
• Labor and Land Use Rights

The three key steps of EUDR due diligence

The EUDR requires companies to have a structured due diligence system in place.

This consists of three key steps:

Information Collection

Companies must collect all relevant supply chain data.

These include:

• Supplier Information
• geolocation data
• Product Information

Risk Analysis

Companies must assess whether there is a risk that the raw material is linked to deforestation.

Factors may include:

• Country of origin
• Deforestation rate in the region
• Supply Chain Transparency

Risk Mitigation

When a risk is identified, companies must take action, such as:

• additional supplier audits
• independent audits
• alternative suppliers

Challenges in Implementing the EUDR for Timber

The practical implementation of the regulation presents many companies with new challenges.

Complex supply chains

Wood products often go through several stages of production and pass through the hands of multiple intermediaries.

Missing geographic data

Many suppliers do not yet have precise geographic coordinates for their growing areas.

Data Management

Companies must manage large volumes of supply chain and sustainability data.

Collaboration with Suppliers

Many companies are now required to systematically request sustainability data from suppliers for the first time.

How Companies Can Prepare for the EUDR

Companies should begin implementation early on.

The key steps are:

• Assess Your Impact: Check whether your products fall under the EUDR.
• Mapping Supply Chains: Identify all suppliers and production stages.
• Define data requirements: Determine early on what information your suppliers need to provide.
• Conduct a risk analysis: Assess deforestation risks throughout the entire supply chain.
• Leveraging Digital Solutions: Software solutions can help document supply chains in a structured manner and efficiently implement EUDR requirements.

Top Software EUDR Compliance

Implementing the EU Deforestation Regulation (EUDR) requires structured data management throughout the entire supply chain.

Companies must:

• Document supply chains
• Manage geolocation data
• Conduct risk analyses
• Prepare due diligence statements

For many companies, specializedSoftware is therefore becoming an important part of the implementation process.

Key Features of EUDRSoftware

A suitable solution should help companies:

• Mapping supply chains transparently
• Collecting supplier data in a structured manner
• Manage geolocation data
• to analyze deforestation risks
• document regulatory requirements

ESGSoftware EUDR: Solutions such as cubemos

Modern ESG software solutions such as cubemos help companies efficiently implement EUDR requirements.

With this Software , companies Software , among other things:

Digitizing supply chains

• Document suppliers and production stages
• Provide a transparent overview of material flows

Collect EUDR-related data

• Manage geolocation data
• Store supplier information in a central location
• Document product data

Conduct risk analyses

• Assess deforestation risks
• Identify high-risk areas
• Prepare documentation for audits

Structuring due diligence processes

• Automate data collection
• Manage documentation centrally
• meet regulatory requirements efficiently

Especially in complex timber supply chains with many suppliers, a digital solution can help ensure that EUDR requirements are implemented in a scalable and audit-proof manner.

FAQ on the EUDR and Timber

What does EUDR mean for wood products?

The EU Deforestation Regulation (EUDR) requires companies to demonstrate that their timber products do not originate from deforested areas. To do so, companies must collect detailed supply chain information and geodata and submit a due diligence statement.

Which wood products are covered by the EUDR?

The EUDR applies to numerous wood products, including:

• Roundwood
• Sawn timber
• plywood
• Furniture
• Wooden packaging

Whether a product is affected is determined by its HS code.

What data do companies need to collect for timber supply chains?

Among other things, companies must collect the following data:

• Geographic coordinates of the forested area
• Country of origin
• Supplier Information
• Product quantity
• Proofs of legality

Do retailers also have to comply with the EUDR?

Yes. Retailers must document information about their suppliers and customers and ensure product traceability if they are either primary operators or are at the beginning of the supply chain.

What are the risks of violating the EUDR?

Companies that fail to meet the requirements face penalties, including:

• heavy fines
• Sales bans
• Seizure of goods

Conclusion: EUDR is bringing about lasting change in the timber supply chain

The EU Deforestation Regulation (EUDR) will significantly increase transparency in global supply chains.

For businesses, this means above all:

• New requirements for supply chain data
• closer cooperation with suppliers
• structured risk analyses

Companies that begin implementation early and adopt digital solutions can reduce regulatory risks and make their supply chains more sustainable in the long term.