EUDR and Wood: Requirements, Obligations, and Implementation for Companies

The new EU Deforestation Regulation (EUDR) is fundamentally changing the requirements for raw material supply chains worldwide. Wood as a raw material and products made from it are particularly affected. Companies that import, produce, or trade wood or wood products into the EU will in the future have to prove 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 only sell or export these products within the EU if they can prove that they:‍

1. were produced without causing deforestation
2. were legally produced
3. are documented in a Due Diligence Statement are documented

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 in many regions of the world is a major driver of deforestation.

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 even processed wood products may be subject to the EUDR.

Examples:

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

Which wood products are covered by the EUDR?

The regulation defines the affected products using what are known as HS codes (Harmonized System codes).

Key wood products include:

• Roundwood
• Sawn timber
• Plywood
• Veneers
• Wood panels
• Furniture

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

Which companies are affected by the EUDR?

The EUDR generally distinguishes between two roles:

Primary Operators

Primary operators place affected products on the EU market for the first time or export them.

Examples of Primary Operators:

• Wood importer
• Furniture manufacturer that uses wood as a raw material

Primary Operators bear full responsibility for due diligence.

Traders

Traders

Traders resell products within the EU. They are one step behind the primary operator in the supply chain.

Their obligations are slightly reduced; however, they must also:

• Document supply chains
• Store Information
• Ensure traceability

What Data Companies Must Collect for Wood Supply Chains

A key element of the EUDR is the complete traceability of the supply chain back to the forest area.

Companies must collect the following information:

Geolocation data

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

These data are crucial for verifying whether the area was deforested after December 31, 2020.

Supply chain information

Companies must document all parties involved in the supply chain:

• Producers
• Traders
• Intermediaries
• Processors

Production data

In addition, information is required on:

• Product type
• Country of origin
• Quantity of raw materials

Proof of Legality

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

• Permits
• local environmental regulations
• labor and land use rights

The Three Core Steps of EUDR Due Diligence

The EUDR requires companies to implement a structured due diligence system.

This consists of three key steps:

Information gathering

Companies must collect all relevant supply chain data.

These include:

• Supplier Information
• Geolocation data
• Product Data

Risk Assessment

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

Once a risk is identified, companies must take measures such as:

• additional supplier checks
• independent audits
• alternative suppliers

Challenges in Implementing the EUDR for Wood

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

Complex Supply Chains

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

Missing Geodata

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

Data Management

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

Collaboration with Suppliers

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

How Companies Can Prepare for the EUDR

Companies should begin implementation early.

Key steps include:

• Analyze the impact: Check whether your products are subject to the EUDR.
• Map supply chains: Identify all suppliers and production stages.
• Define data requirements: Clarify early on what information your suppliers need to provide.
• Conduct a risk analysis: Assess deforestation risks throughout the entire supply chain.
• Use digital solutions: Software can help document supply chains in a structured manner and efficiently implement EUDR requirements.

Top Software EUDR Compliance

The implementation of 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
• Create due diligence statements

Therefore, for many companies, specialized EUDR software becomes an important part of the implementation.

Key Features of EUDR Software

A suitable solution should help companies to:

• map supply chains transparently
• collect supplier data in a structured manner
• manage geolocation data
• analyze deforestation risks
• document regulatory requirements

ESG Software EUDR: Solutions such as cubemos

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

With this software, companies can, among other things:

digitally track supply chains

• document suppliers and production stages
• map raw material flows transparently

collect EUDR-relevant data

• manage geolocation data
• centrally store supplier information
• document product data

conduct risk analyses

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

Structure due diligence processes

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

Especially in the case of complex timber supply chains involving many suppliers, a digital solution can help implement the EUDR requirements in a scalable and audit-proof manner.

FAQ on the EUDR and Timber

What does EUDR mean for timber products?

The EU Deforestation Regulation (EUDR) requires companies to prove that 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 timber products are covered by the EUDR?

The EUDR applies to numerous timber products, including:

• Roundwood
• Sawn timber
• Plywood
• Furniture
• Wood packaging

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

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

Among other things, companies must collect the following data:

• Geocoordinates of the forest area
• Country of origin
• Supplier Information
• Product quantity
• Proofs of Legality

Do traders also have to comply with the EUDR?

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

What are the risks of violating the EUDR?

Companies that do not meet the requirements face sanctions, including:

• high fines
• sales bans
• confiscation of goods

Conclusion: The EUDR fundamentally transforms wood supply chains

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

For businesses, this primarily means:

• New requirements for supply chain data
• increased collaboration with suppliers
• structured risk assessments

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