Navigating EUDR compliance just got clearer. This analysis dissects the European Commission’s newly released 2025 guidelines, providing essential clarity for businesses dealing in beef, cocoa, coffee, palm oil, rubber, soy, and wood supply chains. Building upon Regulation (EU) 2023/1115, these guidelines offer critical direction for fulfilling the EU’s stringent deforestation-free product requirements.
1. Introduction to the EUDR
The EUDR mandates that companies ensure their products are deforestation-free and legally sourced. This applies to both EU-based and non-EU-based operators and traders who place relevant commodities on the Union market or export them. The regulation covers a wide range of products, from raw materials like timber and soybeans to processed goods such as paper, furniture, and chocolate.
2. Key obligations under the EUDR
The EUDR introduces a tiered system of obligations based on the type of company (operator or trader), its size (SME or non-SME), and its position in the supply chain (upstream or downstream). Following our previous analysis of the regulation, below is a breakdown of the key obligations.
2.1. Due Diligence (DD) requirements
Companies must exercise due diligence to ensure that their products are deforestation-free and comply with relevant laws. This involves:
- Risk Assessment: identifying and assessing the risk of deforestation in their supply chains.
- Risk Mitigation: implementing measures to mitigate identified risks.
- Documentation: maintaining records of due diligence processes and outcomes.
2.2. Due Diligence statement (DDS) submission
Operators and traders must submit a due diligence statement to the EU’s Information System before placing products on the market or exporting them. The DDS must include:
- Details of the operator/trader.
- Information on the product, including its origin and geolocation.
- Reference numbers of existing due diligence statements, if applicable.
2.3. Record-keeping requirements
Companies must keep records of their due diligence processes, including supplier information, risk assessments, and mitigation measures. These records must be retained for at least five years.
2.4. Public reporting
Non-SME operators and traders are required to publicly report on their due diligence activities, ensuring transparency and accountability.
3. Operators’ roles and requirements
The EUDR differentiates between operators and traders, as well as between SMEs and non-SMEs. The obligations vary depending on the company’s role in the supply chain:
3.1. Upstream operators
Upstream operators are companies that first place relevant products on the European Union market or export them. They must exercise full due diligence and submit a due diligence statement. For example, a coffee importer bringing beans from a third country or a timber company harvesting logs in the EU falls under this category.
3.2. Downstream operators
Downstream operators transform or process relevant products into new products. They must ascertain that due diligence has been exercised upstream and, if they are non-SMEs, submit a due diligence statement. For instance, a furniture manufacturer using sawn wood or a chocolate producer using cocoa beans would be downstream operators.
3.3. Traders
Traders make relevant products available on the Union market without transforming them. Non-SME traders have the same obligations as non-SME operators, while SME traders are exempt from submitting due diligence statements but must keep records of existing statements.
4. Supply chain scenarios
The European Commission’s guidelines provide 11 detailed supply chain scenarios to illustrate how the EUDR applies in practice. These scenarios cover domestic and imported commodities, as well as various stages of the supply chain. Below are some key examples.
4.1. Coffee supply chain
A non-SME coffee roaster imports coffee beans from a third country and sells them to a wholesale distributor. The roaster, as an upstream operator, must exercise due diligence and submit a due diligence statement. The distributor, as a non-SME trader, must ascertain that due diligence was exercised upstream and submit its own statement.
4.2. Imported palm oil supply chain
A large company imports palm oil from a third country and sells it to an oilseed processing company. The importer, as a non-SME upstream operator, must exercise due diligence and submit a due diligence statement. The processing company, as a non-SME downstream operator, must ascertain that due diligence was exercised upstream and submit its own statement for processed products like stearic acid.
4.3. Domestic timber supply chain
A forest owner in the EU sells logs to a timber company, which processes them into paper products. The forest owner, as an SME upstream operator, must exercise due diligence and submit a due diligence statement. The timber company, as a non-SME downstream operator, must ascertain that due diligence was exercised upstream and submit its own statement.
5. Customs declarations and traceability
For imported or exported products, companies must include the due diligence statement reference number in their customs declarations. This ensures that only compliant products enter or leave the Union market. Additionally, the EUDR mandates strict traceability requirements, prohibiting the mixing of deforestation-free commodities with those of unknown origin.
6. Implementing the EUDR in practice: step-by-step implementation for coffee and cocoa importers
The European Union’s Regulation on Deforestation-free Products (EUDR) imposes strict due diligence obligations on companies importing commodities such as coffee and cocoa into the EU. For coffee and cocoa importers, compliance with the EUDR involves a series of well-defined steps to ensure that their products are deforestation-free and legally sourced. Below is a detailed, step-by-step guide based on the European Commission’s guidelines, followed by an exploration of how blockchain technology can facilitate compliance.
6.1. Identify your position in the supply chain
Coffee and cocoa importers are typically upstream operators under the EUDR, as they are the first to place these commodities on the Union market. This means they bear the primary responsibility for exercising due diligence and ensuring compliance with the regulation.
6.2. Conduct a risk assessment
Importers must assess the risk of deforestation and illegal practices in their supply chains. This involves:
- Mapping the supply chain: identify all suppliers, including farmers, cooperatives, and intermediaries, and trace the origin of the coffee or cocoa beans back to the specific plots of land where they were grown.
- Geolocation data: collect precise geolocation data (latitude and longitude) for all plots of land used to produce the coffee or cocoa. This data must be verified to ensure accuracy.
- Risk indicators: evaluate risk factors such as the country of origin (e.g., high-risk countries with significant deforestation rates), the presence of protected areas, and compliance with local laws.
6.3. Mitigate identified risks
If risks are identified, importers must take steps to mitigate them. This may include:
- Engaging with suppliers: Work with suppliers to ensure they adhere to deforestation-free practices and comply with local laws.
- Third-party audits: Conduct independent audits of suppliers to verify compliance.
- Certification schemes: Use recognized certification schemes (e.g., Rainforest Alliance, Fairtrade) as part of the risk mitigation process, though these alone are not sufficient for EUDR compliance.
6.4. Submit a Due Diligence Statement (DDS)
Before placing coffee or cocoa on the European Union market, importers must submit a Due Diligence Statement (DDS) to the EU’s Information System. The DDS must include:
- Company information: name, address, and contact details of the importer.
- Product information: description of the coffee or cocoa, including the Harmonized System (HS) code.
- Geolocation data: precise coordinates of the plots of land where the coffee or cocoa was grown.
- Risk assessment and mitigation: usmmary of the risk assessment and measures taken to mitigate risks.
- Reference numbers: If applicable, reference numbers of existing due diligence statements from upstream suppliers.
6.5. Maintain records
Importers must keep detailed records of their due diligence processes for at least five years. This includes:
- Supplier information.
- Risk assessment reports.
- Mitigation measures.
- Copies of due diligence statements.
- Customs declarations with DDS reference numbers.
6.6. Ensure traceability
The EUDR requires full traceability of commodities back to their origin. Importers must ensure that:
- Coffee and cocoa beans are segregated from non-compliant or unknown-origin products at every stage of the supply chain.
- Mass balance systems that allow mixing of compliant and non-compliant products are not used.
6.7. Public reporting (for Non-SMEs)
Non-SME importers must publicly report on their due diligence activities, providing transparency and accountability to stakeholders.
6.8. Coffee importer scenario
A non-SME coffee importer in Germany sources coffee beans from smallholder farmers in Vietnam. Here’s how they implement the EUDR:
- Mapping the supply chain: the importer works with a cooperative in Vietnam to map the supply chain, identifying all farmers and collecting geolocation data for their coffee plots.
- Risk assessment: the importer assesses the risk of deforestation in Vietnam, focusing on regions with high deforestation rates, by verifying that the coffee plots are not located in protected areas.
- Mitigation: the importer provides training to farmers on sustainable practices and conducts third-party audits to ensure compliance.
- DDS submission: before importing a shipment of coffee beans, the importer submits a Due Diligence Statement to the EU Information System, including geolocation data and risk assessment details.
- Customs declaration: the importer includes the DDS reference number in the customs declaration for the shipment.
- Record-keeping: the importer maintains records of all due diligence activities, including supplier information and audit reports.
7. Blockchain technology for EUDR compliance
Blockchain technology offers a powerful tool for enhancing transparency and traceability in supply chains, making it particularly valuable for EUDR compliance (see KOA’s Swiss company example). Here’s how blockchain can be used:
- Immutable records: blockchain creates an immutable ledger of transactions, ensuring that data on the origin and movement of coffee and cocoa cannot be altered or tampered with.
- Real-time tracking: importers can use blockchain to track the movement of commodities in real time, from the farm to the EU market. This ensures full traceability and segregation of compliant products.
- Geolocation verification: blockchain can store and verify geolocation data, providing proof that coffee and cocoa were sourced from deforestation-free areas.
- Smart contracts: smart contracts can automate compliance checks, ensuring that only products with valid due diligence statements are placed on the market.
- Supplier engagement: blockchain platforms can facilitate collaboration between importers and suppliers, enabling real-time data sharing and verification.
For example, a Vietnamese coffee exporter could use a blockchain platform to record geolocation data and supply chain transactions. The German importer could then access this data in real time, ensuring compliance with the EUDR and simplifying the due diligence process.
8. Conclusion
Successfully navigating EUDR compliance, particularly for coffee and cocoa importers, hinges on a meticulous approach to due diligence, risk assessment, and traceability.
The European Commission’s 2025 guidelines provide a critical roadmap for achieving these standards, offering the most current insights for businesses. Integrating innovative tools like blockchain technology further strengthens transparency and efficiency, positioning companies for sustainable growth within the EU market.
By leveraging these guidelines and technologies, businesses can confidently meet the EU’s deforestation-free demands and secure a competitive edge.
Dario Dongo
References
- Regulation (EU) 2023/1115 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation. Latest consolidated version: 26.11.24 https://tinyurl.com/3854rr2m
- European Commission: Directorate-General for Environment (2025). EUDR compliance – Understanding your position in beef, cocoa, coffee, palm oil, rubber, soy, and wood supply chains, Publications Office of the European Union. https://data.europa.eu/doi/10.2779/4084343
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
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