EUDR and Wood: Requirements, Obligations, and Implementation for Companies

The new EU Deforestation Regulation (EUDR) is globally changing the requirements for raw material supply chains. The raw material wood and products made from it are particularly affected. Companies that import, produce, or trade wood or wood products into the EU will in future have to prove that these products are not linked to deforestation. The regulation affects thousands of companies in Europe, from furniture manufacturers and paper producers to trading companies.

What is the EUDR?

The EU Deforestation Regulation (EUDR) is an EU regulation to combat global deforestation and forest degradation. It obliges companies to ensure that certain raw materials do not originate from deforested areas.

The regulation was introduced because a significant portion of global deforestation is caused by the international trade in raw materials.

The EUDR affects the following raw materials:

• Wood
• Soy
• Coffee
• Cocoa
• Palm oil
• Beef
• Rubber

Companies may only sell or export these products in the EU if they can prove that they:‍

1. were produced deforestation-free
2. were legally produced
3. are documented by a Due Diligence Statement are documented

Why Wood is a Particular Focus of the EUDR

Wood is one of the most important raw materials in international trade and is used in numerous industries. At the same time, wood production in many regions of the world is a significant driver of deforestation.

Typical industries with wood supply chains include:

• Furniture industry
• Construction industry
• Paper and pulp industry
• Packaging industry
• Retail
• Import and trading companies

Many companies underestimate that even processed wood products may be subject to the EUDR.

Examples:

• Wooden pallets
• Furniture
• Wood packaging
• Wood components in products

Which wood products fall under the EUDR

The regulation defines affected products using so-called HS Codes (Harmonized System Codes).

Key wood products include:

• Roundwood
• Sawn timber
• Plywood
• Veneers
• Wood panels
• Furniture

Companies must check whether their products fall under the affected customs tariff codes. In many cases, not only raw materials but also processed products are affected.

Which companies are affected by the EUDR

The EUDR generally distinguishes between two roles:

Primary Operators

Primary Operators place affected products on the EU market for the first time or export them.

Examples of Primary Operators:

• Importer of wood
• Furniture manufacturer using wood raw materials

Primary Operators bear the full responsibility for due diligence.

Traders

Traders

Traders resell products within the EU. They are one step behind the Primary Operator in the supply chain.

Their obligations are slightly reduced; however, they must also:

• Document supply chains
• Store information
• Ensure traceability

What data companies must collect for wood supply chains

A key element of the EUDR is the complete traceability of the supply chain back to the forest area.

Companies must collect the following information:

Geolocation data

• precise coordinates of the forest area
• Size of the cultivated area

These data are crucial to verify whether the area was deforested after December 31, 2020 .

Supply chain information

Companies must document all actors in the supply chain:

• Producers
• Traders
• Intermediaries
• Processors

Production data

Additionally, information is required on:

• Product type
• Country of production
• Quantity of raw materials

Proof of legality

Companies must demonstrate that the raw material was legally produced in the country of origin, for example, by:

• Permits
• local environmental regulations
• labor and land use rights

The three core steps of EUDR Due Diligence

The EUDR requires companies to implement a structured due diligence system.

This consists of three core steps:

Information gathering

Companies must collect all relevant supply chain data.

These include:

• Supplier information
• Geolocation data
• Product data

Risk assessment

Companies must assess whether there is a risk that the raw material is linked to deforestation.

Factors may include:

• Country of origin
• Deforestation rate in the region
• Supply chain transparency

Risk Mitigation

Once a risk is identified, companies must take measures, such as:

• additional supplier checks
• independent audits
• alternative suppliers

Challenges in Implementing EUDR for Wood

The practical implementation of the regulation presents many companies with new challenges.

Complex Supply Chains

Wood products often pass through multiple production stages and intermediaries.

Missing Geodata

Many suppliers currently do not yet have precise geocoordinates for cultivation areas.

Data Management

Companies must manage large volumes of supply chain and sustainability data.

Collaboration with Suppliers

Many companies are now required for the first time to systematically request sustainability data from suppliers.

How Companies Can Prepare for EUDR

Companies should start implementation early.

Key steps include:

• Analyze impact: Check if your products fall under EUDR.
• Map supply chains: Identify all suppliers and production stages.
• Define data requirements: Clarify early on what information your suppliers need to provide.
• Conduct risk analysis: Assess deforestation risks throughout the entire supply chain.
• Utilize digital solutions: Software solutions can help to document supply chains in a structured manner and efficiently implement EUDR requirements.

Top Software for EUDR Compliance

The implementation of the EU Deforestation Regulation (EUDR) requires structured data management throughout the entire supply chain.

Companies must:

• Document supply chains
• Manage geolocation data
• Conduct risk analyses
• Create due diligence statements

Therefore, for many companies, specialized EUDR software becomes an important part of the implementation.

Key Features of EUDR Software

A suitable solution should help companies to:

• map supply chains transparently
• collect supplier data in a structured manner
• manage geolocation data
• analyze deforestation risks
• document regulatory requirements

ESG Software for EUDR: Solutions like cubemos

Modern ESG software solutions like cubemos help companies efficiently implement EUDR requirements.

With the software, companies can, among other things:

digitally record supply chains

• document suppliers and production stages
• map raw material flows transparently

collect EUDR-relevant data

• manage geolocation data
• centrally store supplier information
• document product data

conduct risk analyses

• Assess deforestation risks
• Identify risk regions
• Prepare documentation for audits

Structure due diligence processes

• Automate data collection
• Manage documentation centrally
• Efficiently meet regulatory requirements

Especially with complex timber supply chains involving many suppliers, a digital solution can help to implement the EUDR requirements scalably and audit-proof.

FAQ on EUDR and Timber

What does EUDR mean for timber products?

The EU Deforestation Regulation (EUDR) obliges companies to prove that timber products do not originate from deforested areas. To do this, companies must collect detailed supply chain information and geodata and submit a due diligence statement.

Which timber products are affected by the EUDR?

The EUDR affects numerous timber products, including:

• Roundwood
• Sawn timber
• Plywood
• Furniture
• Wood packaging

Whether a product is affected is defined by its respective HS code.

What data do companies need to collect for wood supply chains?

Among other things, companies must collect the following data:

• Geocoordinates of the forest area
• Country of production
• Supplier information
• Product quantity
• Proofs of legality

Do traders also have to comply with the EUDR?

Yes. Traders must document information about their suppliers and customers and ensure product traceability if they are either primary operators or are at the first stage of the supply chain.

What are the risks of violating the EUDR?

Companies that do not meet the requirements face sanctions, including:

• high fines
• sales bans
• confiscation of goods

Conclusion: EUDR fundamentally transforms wood supply chains

The EU Deforestation Regulation (EUDR) will significantly increase transparency in global supply chains.

For businesses, this primarily means:

• new requirements for supply chain data
• increased collaboration with suppliers
• structured risk assessments

Companies that start implementation early and utilize digital solutions can reduce regulatory risks and make their supply chains more sustainable in the long term.