Solutional
The EU Deforestation Regulation (EUDR) affects far more than forestry companies. Businesses that produce, import, trade, or sell goods containing cocoa, coffee, rubber, palm oil, wood, soy, or cattle-derived materials may also need to prove that their supply chains meet the regulation's requirements.
Although the regulation entered into force in 2023, implementation has been postponed several times. The stated application date in this article is 01.2026. Understanding the requirements, collecting supplier data, and establishing reporting processes can take considerable time, so companies should prepare before the deadline becomes immediate.
The purpose of the EUDR, the European Union Regulation on Deforestation-Free Products, is to reduce global deforestation associated with EU consumption. According to the UN Food and Agriculture Organization, deforestation is a major driver of biodiversity loss and climate change.
Without effective measures, EU consumption and production involving beef, cocoa, coffee, palm oil, soy, rubber, and wood could contribute to an estimated 248,000 hectares of deforestation per year by 2030.
The regulation therefore restricts products whose raw materials come from land deforested after December 31, 2020. The rules apply to EU businesses and importers from third countries and cover both the seven listed commodities and many derived products, including leather goods, wooden furniture, and chocolate.
EUDR Deadlines and the Possible Extension
Micro and small enterprises with annual turnover below €10 million and fewer than 50 employees are expected to receive an additional six months. With the extension described in this article, their deadline could move to the middle of 2027.
That provides extra preparation time, particularly for companies that were previously unaware of the detailed evidence and reporting obligations.
Representatives of Estonia's Ministry of Regional Affairs and Agriculture have also said that work is under way to simplify the regulation. The practical form of those changes was not yet clear when this article was written.
Unlike an EU directive, which member states transpose into national law, an EU regulation applies directly across the Union. Member states retain responsibility for supervision and penalties, but they do not independently redesign the core compliance requirements.
Smaller businesses should not assume that a later formal deadline removes all immediate pressure. Large customers may require suppliers to provide compliant data earlier so that the larger company can manage its own supply-chain risk.
What EUDR Compliance Requires
EUDR introduces substantial data and due-diligence obligations. Companies may need to:
- Identify the geographic origin of relevant raw materials, including GPS coordinates
- Prepare risk assessments
- Submit due-diligence information through the TRACES system
- Preserve reference numbers and supply-chain records
- Demonstrate that products are legal and deforestation-free
Early estimates suggested approximately 100 million declarations per year. Later assessments indicated that the actual volume could be ten times higher.
Due diligence can apply at several stages of the supply chain. In the case of beef, for example, obligations may affect the importer, the manufacturer producing a processed food, and the retailer selling the final product.
Small and medium-sized enterprises may receive exemptions in certain situations, but an SME importing relevant goods directly may still need to submit a declaration. Traders must know their suppliers and customers and retain declaration references for five years.
Country Risk Classification
The detail and scrutiny required can depend on the country where the raw material originated. The European Commission divides countries into low-, standard-, and high-risk groups.
More than one hundred countries are classified as low risk, including all EU member states. The high-risk group listed in this article contains Belarus, the Democratic People's Republic of Korea, Myanmar, and Russia. Other countries fall into the standard-risk category.
A higher-risk origin generally means more extensive due diligence and a greater need for reliable supporting data.
Estonia's Forestry Sector and Other Affected Industries
Estonia's forestry and wood sector is already partly prepared. Under the leadership of the Ministry of Climate, a tool is being developed to help forest owners meet EUDR requirements.
The planned workflow allows users to select relevant forest notifications in the forest register. The system then generates a pre-filled due-diligence form that can be sent to the European reporting environment.
Other affected sectors appear less prepared. Conversations with food producers, farmers, retailers, and other companies suggest that many still do not know how they will collect the required data or submit compliant declarations.
Turning EUDR Compliance Into a Competitive Advantage
Together with the Environment Agency, we created a digital-reporting prototype for Estonia's wood sector. It combines local forest data and transfers the required information to EU TRACES while an electronic waybill is being completed.
The pilot has since developed into EUDRIS, a digital solution designed for organizations of different sizes and sectors. By the time described in this article, the platform had been tested by approximately twenty Estonian companies and institutions, including wood-industry organizations and businesses outside the sector.
The early experience showed meaningful time savings through automated data entry and reduced manual work. This demonstrates that EUDR reporting does not have to remain a spreadsheet- and paperwork-heavy process.
Compliance can also become a commercial advantage. Companies that make their supply chains transparent and establish reliable digital processes may strengthen trust with customers in Estonia and abroad. EUDR can therefore be treated not only as an administrative burden, but also as evidence of responsible sourcing and operational maturity.
Simplify EUDR Reporting With EUDRIS
EUDRIS acts as an intermediary between a company and the EU TRACES environment. It is designed to simplify or automate applications for EUDR reference codes and help businesses document the origin of their products.
We have long worked closely with Estonia’s forest sector. We know that Estonia’s forest data are highly digitized. We anticipated that companies would need help complying with the EUDR requirements and that data-driven reporting could be faster and simpler. I believe that cooperation between the private and public sectors is especially important in the current economically challenging times. The solution created as a pilot is available free of charge to everyone, including the food industry and other sectors that must demonstrate compliance with the EUDR requirements.
