EUDR Readiness: What FMCG and retail brands must do to build deforestation-free supply chains

Why deforestation has become a business issue 

Deforestation is one of the leading contributors to biodiversity loss, ecosystem degradation and greenhouse gas emissions. Agricultural expansion, timber production and commodity cultivation continue to drive forest conversion across many regions, creating environmental, social and economic risks that reach well beyond the areas directly affected. 

For businesses, these risks increasingly show up as supply-chain disruption, regulatory exposure, reputational concern and growing stakeholder scrutiny. Consumers, investors and policymakers are placing more weight on responsible sourcing, and sustainability reporting frameworks increasingly expect organisations to understand environmental impacts right across their value chains. 

Governments have responded by moving beyond voluntary commitments towards mandatory due diligence. One of the most significant developments on this front is the EUDR, which sets new obligations for organisations sourcing and trading products linked to forest-risk commodities. Rather than relying on environmental commitments alone, the regulation requires businesses to demonstrate that products entering or leaving the EU market have not contributed to deforestation or forest degradation. 

What is the EUDR? 

The EUDR is designed to reduce the EU's contribution to global deforestation by restricting the placement of products linked to recent deforestation or forest degradation on the European market. 

Under the regulation, organisations placing relevant commodities or derived products on the EU market, or exporting them from the EU, must demonstrate that these products are: 

The regulation shifts responsibility from governments to businesses, requiring organisations to understand where their products originate, assess supply-chain risk and keep evidence to demonstrate compliance. Unlike previous sustainability initiatives that leant heavily on voluntary certification, the EUDR introduces mandatory legal obligations backed by due diligence requirements. 

Where the timeline actually stands 

The EUDR's application date has moved twice since the regulation was first adopted, and it is worth being precise about where things stand now rather than working from the original schedule. 

Large and medium-sized operators and traders must now comply from 30 December 2026. Micro and small enterprises have until 30 June 2027. Both dates reflect a further twelve-month postponement announced in late 2025, on top of the one-year delay agreed in 2024, so this is the second time the deadline has moved. As things stand today, that gives most affected organisations a few months of preparation time still on the clock before the large and medium company deadline lands. 

Alongside the postponement, the European Commission published a formal simplification review of the regulation on 3 May 2026. The Commission's own estimate is that these simplification measures should cut annual compliance costs for companies subject to EUDR obligations by around 75% compared with the original regulation, largely through a country risk classification system that allows lighter due diligence for lower-risk sourcing (more on this below). 

Two postponements and a substantial simplification review are a reasonable signal that the practical shape of compliance is still settling. Worth checking for updates periodically as the December 2026 deadline approaches, rather than assuming today's detail is the final word. 

Which commodities are covered? 

The EUDR applies to several commodities identified as major drivers of global deforestation, along with a wide range of products derived from them. These include: 

The regulation also covers numerous derived products, such as furniture, leather goods, paper products, chocolate, coffee products and various processed food items, depending on classification. 

For FMCG and retail businesses, this means a lot of commonly sourced ingredients, raw materials and consumer products can fall within scope. Because many products contain multiple commodities sourced from different regions, organisations often need visibility across several tiers of their supply chain to be confident of their position. 

Who is affected? 

Although the regulation is European, its reach extends well beyond organisations headquartered in the EU. The EUDR applies to operators and traders that place relevant products on the EU market or export them from the EU. This includes many: 

Non-EU organisations supplying products into European markets can be affected indirectly too, as their EU customers increasingly need evidence to support their own regulatory compliance. As a result, organisations right across global supply chains are likely to keep seeing more requests for sourcing information, geolocation data and supplier documentation, regardless of where they themselves are based. 

Why the EUDR is different from previous sourcing initiatives 

Many organisations already run responsible sourcing programmes built around supplier codes of conduct or sustainability certifications. These remain valuable, but the EUDR introduces a considerably more rigorous regulatory approach. 

The regulation requires organisations to demonstrate compliance through documented due diligence rather than relying solely on supplier declarations or voluntary certification schemes. Businesses need to be able to show where products originated, assess deforestation risk and hold onto evidence supporting their conclusions. That puts far more weight on supply-chain transparency, traceability and governance than most previous responsible sourcing programmes required. 

A lighter path for lower-risk sourcing 

One of the more useful outcomes of the 2026 simplification review is a country risk classification system that sorts sourcing countries and regions into low, standard or high risk. Where an organisation sources exclusively from countries classified as low risk, it can use simplified due diligence under Article 13 of the regulation. 

This does not remove the obligation entirely. Operators still need to collect the required sourcing information and submit a due diligence statement, or in some cases a simplified declaration, through the EU's TRACES information system. But the depth of assessment required is considerably lighter than for standard or high-risk sourcing. Micro and small primary operators sourcing from low-risk countries have it easier still: many can file a single simplified declaration covering their sourcing, rather than a full due diligence statement for each placement on the market. 

For FMCG and retail businesses sourcing from a mix of regions, this makes country-by-country risk classification worth checking early. It can meaningfully change how much due diligence work a given supply chain actually requires. 

Building EUDR readiness 

Preparing for the EUDR takes more than reviewing procurement policy. Organisations increasingly need structured governance processes capable of supporting ongoing due diligence across complex supply chains. Several practical priorities tend to come up again and again. 

Understand product scope 

Start by identifying whether the products or commodities your organisation handles fall within the regulation. Many businesses are running product-level reviews to work out which commodities are covered, where they are sourced, which suppliers are involved and which business units are affected. Getting this scope clear early helps prioritise everything that follows. 

Map the supply chain 

Supply-chain mapping has become one of the most important parts of EUDR preparation. Organisations need visibility beyond direct suppliers, right through to where commodities actually originate and how they move through processing and distribution networks. For a lot of FMCG businesses, that means tracing multiple sourcing regions, intermediaries and processing facilities before products even reach manufacturing. This exercise tends to surface data gaps that need further supplier engagement to close. 

Strengthen supplier engagement 

Supplier relationships matter more than ever under the EUDR. Many organisations are working with suppliers to obtain commodity origin information, farm or production site details, geolocation data, legal compliance documentation, traceability records and sustainability certifications where relevant. Rather than treating this purely as a procurement task, it is worth treating supplier collaboration as an ongoing relationship that supports broader supply-chain resilience, not a one-off compliance exercise. 

Develop due diligence processes 

The regulation requires structured due diligence procedures covering information gathering, risk assessment, risk mitigation, and documentation and record keeping. This usually needs collaboration across procurement, legal, sustainability, compliance and operations teams. Where sourcing is confirmed as low risk under the country classification system, some of this process can be considerably lighter, so it is worth mapping which of your supply chains might qualify before building out a full due diligence process for everything. Many organisations are integrating EUDR requirements into existing supplier risk management and ESG governance frameworks to improve efficiency rather than running it as a separate system.