Operators and traders who place certain goods on the European Union (EU) Market or export from it, must begin complying with the EU Deforestation Regulation (EUDR) by December 30, 2024. Understanding the differences between the EUDR and the previous EU Timber Regulation (EUTR) is essential for meeting the new regulation’s due diligence and compliance standards. The regulations, though similar in their objective to reduce deforestation and promote sustainability, differ in their scope and execution.
Let's explore the differences between the EUDR and the EUTR and what you need to know for compliance.
Understanding the EU Deforestation Regulation
The EUDR aims to ensure that products placed on, or exported from, the EU Market do not contribute to deforestation and forest degradation. Specifically, the regulation targets seven commodities that must be deforestation-free and legally sourced, which includes compliance with human rights, labor rights, and anti-corruption laws.
Read our EUDR overview blog to learn more about the specifics of the regulation.
Is the EU Deforestation Regulation replacing the EU Timber Regulation?
Yes, the EU Deforestation Regulation repealed and replaced the EU Timber Regulation as of June 29, 2023, when it entered into force. Operators and traders now have until December 30, 2025, to implement the new rules. Micro and small enterprises have until June 30, 2026, to comply.
Who is considered an operator or trader under the EUDR?
Both operators and non-SME traders have the same compliance and reporting obligations under the EUDR. The regulation defines them as follows:
Operator: An operator is defined as a natural or legal person who places products (including imports) on the EU market or exports products during commercial activity. This applies to companies that process commodities within the scope of the regulation into other products. For example, suppose a company imports cocoa butter and a different company uses that cocoa butter to produce chocolate and places it on the EU market. In that case, both companies are considered operators under the EUDR.
Non-SME Trader: A non-SME trader is defined as any large company that is not an operator and commercializes products containing commodities within the regulation's scope. For example, supermarkets or retail chains are considered non-SME traders under the EUDR.
Key differences between the EUTR and the EUDR
Understanding the key differences between the EUTR and the EUDR will help your business achieve compliance, reduce supply chain risk, and avoid supply chain disruptions. The primary differences between the two regulations include the following:
Scope of Products and Commodities
EUTR: Targeted timber and timber products to curb illegal logging.
EUDR: Expands beyond timber, covering a range of commodities known to cause deforestation regardless of legality. The full list of commodities under the scope of the EUDR are:
- Timber
- Beef
- Rubber
- Coffee
- Cocoa
- Palm oil
- Soy
Certain derivatives of these commodities also fall under the EUDR, such as chocolate, furniture, and leather.
Traceability and Risk Assessment
EUTR: Focused on the legality of timber and timber products rather than traceability. While all traders who bought and sold timber on the EU market were required to keep a record of their suppliers and customers, this requirement was intended to ensure that the timber was legally harvested rather than sustainably sourced. As such, the EUTR did not always prevent deforestation.
EUDR: In addition to legality, the EUDR requires detailed geolocation traceability to determine where the commodity was produced or grown, and if it was associated with deforestation. Eventually, the EU will release an information system that will assign deforestation risk levels to countries and make all related data accessible on a unified online platform, including due diligence statements.
Due Diligence Requirements
EUTR: Required operators to ensure that timber and timber products placed on the EU market were legally harvested. Operators were mandated to utilize a due diligence system, whether it was the operator’s system, or one created by a monitoring organization recognized by the European Commission. The EUTR also allowed exemptions for certain wood products.
EUDR: Mandates the implementation of a due diligence system to prevent products linked to deforestation from being placed on the EU market. Companies must follow a three-step process outlined by the European Commission, which includes collecting commodity/production information, assessing risk, and carrying out risk mitigation efforts.
After completing these compliance obligations, companies must submit a due diligence statement to the upcoming EU Information System, confirming that they have successfully conducted due diligence and that the products they place on the market are both legally harvested and deforestation-free.
Learn more about the specifics of the EUDR due diligence process here.
Mitigate EUDR compliance risk with Source Intelligence
Our comprehensive EUDR program will enable you to mitigate risk and ensure compliance with the new EU Deforestation Regulation. Our powerful software facilitates product tracing and legality risk assessments, as well as document collection and management. With law-based compliance processes, premade set-ups for each commodity, and several reporting formats, we provide the necessary tools to help your business streamline EUDR compliance obligations.
We offer flexible solutions to meet your specific needs. If you’re looking to self-manage your EUDR compliance efforts, we provide access to pure SaaS software or, if you want EUDR compliance taken off your plate, our team can manage it on your behalf.
Get in touch to learn how Source Intelligence can ensure you are sourcing deforestation-free commodities.
