What is a DDS and updates on its application
From 2026, EU companies will be subject to the EUDR (EU Deforestation Regulation, deforestation-free supply chains). On 15 April 2025, the European Commission published updated guidelines on this. One key simplification listed in the guidelines is that due diligence statements can be used multiple times. This due diligence statement is what lies behind the abbreviation DDS (Due Diligence Statement). It allows you to prove that you have fulfilled your due diligence obligations to use only deforestation-free goods in accordance with the EUDR.
Creating your DDS now for EUDR is crucial for several reasons:
To build for future compliance, you need to a strong foundation of support before layering on complex due diligence and reporting requirements. From an implementation perspective, you need to build a proactive strategy and solid implementation framework to reduce compliance risk, strengthen supplier relationships, and lay the groundwork for real impact.
Tackling these regulations piecemeal might check the compliance box, but it usually leads to duplicative work, higher costs, and fragmented strategies. By taking one integrated approach, a company can save time and money, work more efficiently across teams, and build a coordinated, long-term strategy strengthening compliance and impact.
Despite a 12-month delay, the latest EU guidance and Sphera’s own understanding of TRACES confirms that EUDR enforcement will be stricter than originally expected. Companies need the additional time to check supplier readiness to ensure their products are not denied entry or placement on the EU market.
Before you engage with your suppliers and business partners to ensure they are compliant, your company must make sure you have policies, practices, and processes in place to understand your risks and identify what knowledge gaps exist to be aligned with EUDR requirements.
Operators must consider the following:
- Supply chain and product mapping: Have you conducted a thorough examination of your supply chain to understand your exposure to risk?
- Data collection capabilities: Have you collected the essential data from suppliers that is required to comply with reporting?
- Risk assessment and mitigation: Have you conducted a risk assessment to evaluate potential risks associated with deforestation and legal compliance?
- Supplier Engagement: Have we communicated the EUDR requirements to our suppliers and formally incorporated data-sharing requirements into our contracts?
- Reporting and compliance: Are we prepared to submit the required electronic due diligence statement through the designated platform (TRACES)?
- System review: Is your current due diligence system robust enough to meet EUDR requirements? Are there any gaps in our information or processes?
Traders must:
- Data storage: Keep transaction details readily available
- Data sharing: Provide these details to other supply chain links or competent authorities upon request
In cases where a company acts as both an operator and a trader their specific obligations include:
- Submit a due diligence statement specifically for the imported product.
- Gather and maintain detailed records of transactions
- Pass relevant information along the supply chain or to authorities as required.
For all entities, whether in the EU or outside with obligations to comply with the EUDR regulations, it will be important to standardize your workflow and ensure that your enterprise data management system is interoperable with the EU Traces system.
EUDR Due Diligence Steps:
1. Determine your role: Understand your obligations and identify in-scope products and suppliers
2. Internal stakeholder collaboration: Identify and engage with internal stakeholers, while establishing a deforestation policy that is aligned with corporate strategy and risk management resiliency
3. Engage with suppliers: Collect data through risk assessment: Geolocation data, traceability information, legality information, sustainability certifications and increase traceability
5. Monitoring: Mitigate risks and co-create actions plans with supplier for continuous improvement
6. Idenitfy partners: To create the changes needed to make the EUDR a lasting success, companies will need to form partnerships beyond their supply chain.
How Sphera can help you
An integrated EUDR and DDS Solution provides important benefits.
An integrated solution for EUDR and DDS offers significant advantages, enabling companies to meet complex compliance requirements more efficiently.
The European Commission expects that the simplifications to the EUDR regulation will enable companies to reduce their administrative burden and costs by 30 per cent. Large companies are now allowed to reuse existing declarations of due diligence when re-importing goods that have already been traded in the EU. Companies can also submit the DDS annually instead of for each individual delivery or batch.
Companies can use Sphera’s integrated software and platform solution – Supply Chain Transparency(SCT) – to streamline the process of collecting this data and preparing the DDS for submission.
Improved Accuracy:
If a DDS reference number is found, the system retrieves the corresponding existing data record. If no existing DDS reference number is found for an EUDR-relevant product, the system initiates the creation of a new DDS. Therefore, a robust data foundation, built through early stress testing, ensures the accuracy of product classifications and the completeness of the DDS data records
Reduced Manual Effort:
SCT’s automation significantly reduces the manual effort required for due diligence, data entry, and submission, leading to increased efficiency.
Faster Compliance:
SCT provides you the ability to quickly identify EUDR-relevant products and leverage existing DDS data, which accelerates the compliance process, minimizing delays in placing products on the EU market.
Enhanced Traceability:
A well-structured data foundation developed and supported by Sphera’s SCT supports comprehensive supply chain traceability, which is a core requirement of the EUDR.
