EUDR: 80% of Companies Lag Behind Despite Extended Timeline
With the EU Deforestation Regulation (EUDR) being delayed by one year, providing companies and authorities additional time to prepare for its implementation, experts are warning organisations not to be lulled into a false sense of security – only 20% of organisations are currently on-schedule for compliance with the new December 2025 enforcement timeline.
The decision to delay came in response to concerns from EU member states, non-EU countries, and traders, who raised issues about their ability to fully comply with the regulation by the original December 2024 deadline. While the extension aims to ensure businesses can meet due diligence requirements, ensuring deforestation-free products enter the EU market, the eleven months countdown to compliance must be utilised strategically.
Compliance with regulations like the EUDR is particularly challenging for supply chains due to their complexity, global scope, and limited visibility. With suppliers spread across multiple tiers and regions, each adhering to different regulatory standards, obtaining accurate and timely data can be a significant obstacle. The lack of transparency and inconsistent collaboration across the supply chain further complicates efforts. Additionally, frequent regulatory changes require continuous monitoring and swift adaptation, increasing both operational and administrative demands. Non-compliance risks not only legal and financial penalties but also reputational damage and potential supply chain disruptions, making it a top priority for leadership to address these challenges strategically.
Despite the additional time, most companies remain underprepared for EUDR compliance. Fewer than 20% of businesses have established the robust systems needed to meet the regulation’s standards, particularly in areas like supply chain traceability and monitoring.
Key challenges include:
- Limited Traceability: While some companies have implemented deforestation-free initiatives, only a small fraction have information about the sources of each shipment of goods, a critical requirement for EUDR compliance.
- Weak Monitoring and Mitigation: Many companies lack effective monitoring tools to detect and mitigate deforestation risks in their supply chains.
- Industry Disparities: Readiness levels vary significantly across sectors, with industries like timber showing notable gaps in preparedness.
The delay offers a crucial opportunity for businesses to strengthen their practices, but significant effort is needed to align with EUDR’s rigorous standards.
What Steps Should You Be Taking?
To catch up with EUDR compliance, companies must act strategically, tackling key areas month by month to ensure they are ready for full implementation by the end of 2025. Here’s a practical roadmap:
January 2025: Form a Compliance Task Force
- Action: Establish a cross-functional team to oversee EUDR compliance efforts. Include representatives from procurement, legal, sustainability, and supply chain teams.
- Deliverable: Clear roles, responsibilities, and a timeline for achieving compliance milestones.
February 2025: Conduct a Gap Analysis
- Action: Assess current supply chain practices against EUDR requirements. Identify areas where traceability, monitoring, or data collection are insufficient.
- Deliverable: A comprehensive report outlining compliance gaps and prioritizing high-risk areas.
March 2025: Engage Suppliers
- Action: Communicate EUDR requirements to all suppliers and request detailed information on their sourcing practices.
- Deliverable: Results of a supplier risk assessment survey that clearly shows areas of improvement needed.
April 2025: Begin Supply Chain Mapping
- Action: Start mapping your supply chain to identify all suppliers involved in producing EUDR-regulated commodities.
- Deliverable: A visual or digital map of your supply chain highlighting key touchpoints.
May 2025: Implement Data Collection Tools
- Action: Invest in digital tools to track and verify sourcing information that can manage plot level data for each shipment brought into the EU.
- Deliverable: A fully operational system for collecting and storing supplier data.
June 2025: Train Internal Teams and Suppliers
- Action: Conduct training sessions on EUDR requirements and traceability protocols for your team and key suppliers.
- Deliverable: Documented training materials and attendance records.
July 2025: Develop Monitoring Mechanisms
- Action: Establish systems for ongoing monitoring of deforestation risks, such as satellite data or third-party audits.
- Deliverable: A clear process for identifying and addressing deforestation concerns.
August 2025: Pilot Due Diligence Processes
- Action: Test your full compliance processes on a small scale to identify potential issues before full implementation.
- Deliverable: Pilot results and actionable feedback for system improvements.
September 2025: Strengthen Supplier Contracts
- Action: Update supplier contracts to include EUDR compliance clauses and consequences for non-compliance.
- Deliverable: Revised contracts with signed agreements from key suppliers.
October 2025: Finalize Risk Mitigation Strategies
- Action: Develop protocols to address non-compliance, including escalation processes and alternative sourcing plans.
- Deliverable: A documented risk mitigation plan.
November 2025: Conduct a Pre-Compliance Audit
- Action: Perform a comprehensive internal review of your compliance efforts to ensure readiness for EUDR enforcement.
- Deliverable: A report highlighting remaining gaps and action items.
December 2025: Achieve Full Readiness
- Action: Resolve any outstanding issues, ensure all systems and processes are operational, and communicate your readiness to stakeholders.
- Deliverable: A finalized compliance report and public statement of EUDR readiness.
Next month we’ll examine reassessing current data and supply chain practices for EUDR compliance with a complementary checklist to ensure your organisation is on track for December 2025.
