Introduction to EUDR

The EU Deforestation Regulation (EUDR) is a law designed to ensure that certain commodities placed on or exported from the EU market are deforestation-free. This means that companies must ensure their products are not linked to deforestation or forest degradation after December 31, 2020, and that they comply with local laws in their countries of origin.

EUDR applies to cattle, wood, cocoa, coffee, palm oil, soy, and rubber, including many derived products. To comply, companies must trace their supply chains, assess risks, mitigate issues, and submit official due diligence statements. For most companies, the law will apply from December 30, 2025 while small and micro-enterprises have until June 30, 2026.

This article provides a comprehensive seven step guide for business users to comply with EUDR, dividing the process into data collection, risk assessment, risk mitigation, traceability, due diligence, and ongoing monitoring.

Step 1: Confirm your role (operator, trader) in the EUDR process

The obligations of companies under EUDR are formed based on the different roles they play in their value chain and their size. Therefore, identifying your role is the number one step in the process. 

Are you an operator or a trader?

Your first task is to determine whether your company is considered an operator or a trader, as obligations differ:

Operator

Places in-scope products on the EU market for the first time in the product’s value chain, or exports them. The term operator covers multiple business cases – here is an overview with examples:

• Producers in the EU: A forestry company in Finland that harvests pine wood and sells it to a sawmill in Germany
• Importers placing for the first time in the EU market: A Dutch coffee importer that brings in green coffee beans from farms in Colombia and sells them to roasters across Europe
• Exporters: A Portuguese leather goods manufacturer that sources cattle leather from France, uses it to produce luxury handbags, and exports those handbags to the United States
• Manufacturers using products already available in the EU: A Spanish chocolate maker that buys cocoa mass from a French importer and uses it to make chocolate bars for sale within the EU

Trader

Buys and resells in-scope products already on the EU market without transforming them. A typical example is a German wholesaler who purchases bulk unroasted coffee beans from a Dutch importer and sells the same coffee beans (still unroasted) to small roasters and cafés across Germany and Austria, without altering the product.

Some businesses may act as both operator and trader depending on the transaction.

Are you an SME?

Your company is an SME if it meets at least two of the following:

• Average number of employees fewer than 250
• Annual net turnover below €50 million
• Annual balance sheet total below €25 million

SME operators benefit from simplified obligations under EUDR by skipping some of the due diligence steps. 

Non-SME traders, though, must fulfill full due diligence obligations like operators. SME traders face simpler obligations that include mainly retaining and passing on information. You can find an overview below of the basic responsibilities per role. 

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Step 2: Map your products and supply chains included in the EUDR

Not all products are subject to the EUDR. Only certain commodities and their derived products are covered. So the next step is to identify which of your company’s products fall under the EUDR. This involves mapping both the products and their supply chains (origins).

Identifying your in-scope products

EUDR requires you to exercise due diligence on the products you intend to sell in the EU market or export. However to do so you need to understand which raw materials you use to produce these products unless you are the producer yourself. Here is a simple list of what you should check:

• List in-scope commodities in the raw materials used in your products.  A supermarket chain would identify multiple commodities like coffee, palm oil, cocoa, soy and cattle.
• Match products that include the in scope commodities to HS codes. You can check the full list of in scope HS codes in the Annex I of the regulation.
• Map raw materials to final products. This internal traceability mapping will later help ensure you can separate compliant vs non-compliant sources.

Example: A chocolate company should link cocoa and palm oil inputs to each final product to ensure traceability and compliance.

Understanding your supply chain and origins

After you have identified the exact product codes and raw materials used (if any) you are ready to identify the suppliers involved and the countries where the materials come from. 

In order to trace your supply chain:

Identify suppliers and countries of origin:

The suppliers are key stakeholders you will need to collaborate with to collect the needed information for EUDR compliance. The country of origin of your materials is one of the core factors that you should consider in order to address deforestation and legality. If you are the producer yourself you can skip this step.

Furthermore, if you are sourcing from specific countries benchmarked as low risk for deforestation by the EU you can benefit from a simpler due diligence process.

Determine complexity and depth (e.g., number of intermediaries):

This exercise can help you understand where you might have difficulties accessing information, where important risks in the supply chain might lie. 

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Step 3: Collect and organize key data included in the EUDR reporting requirements

Once you know what and where you’re sourcing, you can move on to collecting the specific data that the EUDR requires for compliance. Operators must gather a comprehensive set of data – as outlined in Article 9 – about each shipment of commodity they handle.

Required information:

• Geolocation data of areas of harvest: The GPS coordinates of the plot of land where the commodity was produced. This could mean the farm, plantation, or forest harvesting site. If your product contains multiple ingredients, you need coordinates for each relevant ingredient’s origin 
• Production date: The date or time range when the commodity was produced or harvested​.This is to prove it falls after the EUDR cutoff date requirements and is a required piece of information based on the regulation
• Product details: The description of the product, quantity, and shipment specifics.
• Supply chain contacts: The names, addresses, and emails of all suppliers and customers
• Evidence of legality: You must prove that each product was produced in accordance with the laws of the country of origin. The first step in this is to gather documents primarily in the following legal areas: land ownership, harvesting permits, labor law compliance, indigenous people
• Deforestation-free status: Satellite images or land-use maps showing no deforestation in the areas of harvest as of the cutoff date

Collecting this data can be challenging, especially if your supply chain has many small farmers or intermediaries. Start by creating a standardized data collection process for suppliers, explain EUDR needs, and use traceability tools where feasible. Store data securely and retain it for at least five years.

Step 4: Conduct a robust EUDR risk assessment

Once your data is complete, based on Article 10, you need to assess whether there is more than negligible risk of deforestation or illegality before placing products on the EU market or exporting them.

Risk dimensions to evaluate:

• Country-level risk:
  Forest presence trends, deforestation and degradation trends, environmental protection levels law enforcement, corruption levels, land use and third party issues
• Supply chain-level risk:
  Number of intermediaries, processing complexity, risk of mixing, non compliant partners
• Plot/supplier-level risk:
  Legal permits and titles, indigenous rights, endangered species, labour and human rights violations, deforestation history, post harvest management
• Documentation and conduct risk:
  Missing or unverifiable documents, supplier behavior, transparency issues, past EUDR misconduct

Assess each dimension. If any indicator suggests non-negligible risk, mitigation is required before proceeding. Remember: due diligence is not a check-box exercise, it must be tailored to your context and thorough.

Step 5: Take risk mitigation actions if needed

If your risk assessment finds anything other than negligible risk for a product, the EUDR in Article 11, requires you to take risk mitigation measures before proceeding. In practical terms, this means you must actively reduce the risk to a negligible level, or else you cannot place the product on the market. 

Here’s how businesses can approach risk mitigation:

• Requesting more evidence: Often, the initial data might be insufficient to conclude negligible risk. Reach back out to your supplier for more evidence like extra land documents, or certifications
• Third-party verification: Another mitigation step is to get independent third-party checks. These could be NGO reports or certification audits (e.g. FSC, RSPO)
• On-site audits: If paper evidence isn’t convincing, consider an on-the-ground audit. This could mean sending your own team or hiring local auditors to visit farms or facilities
• Supplier engagement: Work to improve traceability or exclude non-compliant plots. For example, if a supplier’s product currently isn’t compliant, you might give them a chance to remedy it, e.g. agree to source only from certain plots that you verify, or help them implement better tracking
• Supplier switching: If risks remain, sourcing must shift to compliant sources. This is a tough business decision, but the regulation leaves no choice if compliance can’t be achieved

After mitigation, you should re-evaluate the risk. If negligible, you can move forward to the next step. If not, further mitigation or exclusion is needed. By the time you’re done with this step, any product you intend to sell should have a negligible deforestation risk profile and full compliance documentation.

Step 6: Submit your EUDR due diligence statement

Once you have completed the due diligence process (information collection, risk assessment, and needed mitigation), the EUDR requires a final formal step: submitting a due diligence statement (DDS). This is basically an official declaration that you have fulfilled your obligations and that the product meets EUDR requirements. Think of it as signing off that “we did our homework, and to the best of our knowledge, this product is deforestation-free and legal.”

Key details:

• Who submits the DDS: The company placing the product on the market
• How to submit: Through an EU’s information system called EU Traces. You can already familiarise with their test environment
• What’s included: Annex II provides a template on a typical due diligence statement. This includes product information and quantities, risk assessment outcome, compliance attestation
• How frequently to submit: Every shipment needs a due diligence statement. Recent updates allow the submission of DDS on a periodic or aggregated basis if specific criteria apply
• Special cases: Downstream operators and non-SME traders can reference the DDS of upstream operators while submitting their own DDS

Each DDS has a unique reference and verification number. Track each DDS by its unique reference number and ensure it is linked to each shipment.

Step 7: Monitor and update over time

EUDR compliance isn’t a one-time task. Companies must continuously ensure that supply chains remain deforestation-free and legally compliant.

• Ensure every new batch of in-scope products is traceable to origin before it’s placed on the market. Make this a routine part of procurement
• Monitor changes in country risk or sourcing conditions
• Store all due diligence data, risk assessments, and statements for at least five years. Make sure your team can retrieve them quickly in case of an audit
• Prepare for audits by EU authorities. Have a clear process for responding to document requests and demonstrating compliance

Annual reporting

Non-SME operators must publish annual summaries of due diligence activities. First reports are due by the end of 2026.

EUDR compliance checklist

To wrap up the step-by-step guide, here’s an EUDR compliance checklist distilling the key actions. Use this as a quick-reference to ensure you’ve covered all bases:

By following this EUDR checklist, businesses can systematically work through compliance and ensure nothing is overlooked. Early preparation is key – each of these steps can take time, especially for complex supply chains.

Leveraging technology to simplify compliance

Managing EUDR compliance manually can quickly become overwhelming especially as supply chains grow. Digital tools make a difference by:

• Centralizing data collection: Storing and organizing supplier data, GPS coordinates, and compliance documents in one place with no scattered spreadsheets
• Automating risk screening: Instantly flagging high-risk suppliers or regions using built-in risk assessments
• Live deforestation screening: Use of remote sensing with the use of satellites to track deforestation trends
• Supply chain mapping: Visualization of origin-to-market product flows and maintenance of traceability across inputs and outputs
• Due diligence statement management: Preparing and tracking submissions through integrations with the EU portal
• Ongoing monitoring: Providing alerts for missing documents, expiring certifications, or changes in sourcing risk

In short, investing in a digital due diligence system turns a complex compliance burden into a more automated, trackable process. It also helps with other sustainability reporting synergies – for example, the data collected for EUDR (like supply chain traceability) can feed into broader ESG reporting or upcoming regulations like CSDDD. 

Leveraging technology ensures that the foundation remains strong and less labor-intensive over time. Scalable solutions like Coolset are designed to support mid-market companies in exactly this way – by providing an all-in-one platform to manage data, due diligence workflows, and reporting for regulations such as EUDR. The result is not only saved time and reduced risk of error, but also actionable insights that can improve your supply chain transparency beyond just compliance.

Next steps for businesses

Moving forward, evaluate how prepared your business is across the seven steps. Identify gaps in supplier data, internal processes, or reporting systems and decide whether additional support is needed. If managing this manually seems unsustainable, consider whether a platform like Coolset could help streamline your compliance, reduce risk, and scale with your operations.

Would you like to discover how Coolset can help you streamline your compliance across frameworks such as CSRD, EU Taxonomy or EUDR? Reach out to us and explore how we can support your ESG reporting journey. 

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