EUDR Compliance Guidance

Navigating the EUDR compliance pathway

Although the implementation of EUDR has been delayed by one year, to December 2025 for large companies and to June 2026 for SMEs, the clock is ticking and companies must move forward without delay with their compliance systems.

EUDR requires unprecedented levels of transparency and due diligence in the supply chain to ensure that relevant products entering or leaving the EU market do not contribute to deforestation and comply with the regulations of the place of production. Now is the time to start designing and implementing the processes and tools needed to apply this new data-driven approach.

Know your obligations

The foundation of successful compliance begins with understanding whether and how the regulations apply to your company. This requires a careful analysis of both your products and your role in the supply chain.

EUDR covers seven commodities:

• beef cattle
• cocoa
• coffee
• oil palm
• rubber
• soybeans
• timber
• And together with their derived products.

To determine whether your company is affected, check whether your products are classified under the HS specific customs codes (HS Codes) listed in Annex I of the Regulation.

Your obligations will vary depending on your role in the supply chain. EUDR defines two main actors: traders (those who introduce relevant products into the EU market for the first time or export them from the EU) and traders (those who make relevant products available to the market). However, there are three different ways of being a trader:

• importing relevant products from outside the EU;
• manufacturing and placing on the market for the first time relevant products
• produced in the EU;
• or exporting them from the EU.

Some companies may be exempt, such as those working exclusively with recycled products or waste materials, but will still need documentation to prove this exemption.

Building your compliance framework

Once you have confirmed that the regulations apply to your company, it is essential to create a structured approach to compliance. What does this mean? Establish a management system that documents your due diligence process.

It doesn’t have to be expensive new software. It can be as simple as a manual outlining your processes. The important thing is that it fits your needs. The key is to have documented procedures that demonstrate how your organization conducts due diligence.

It doesn’t have to be expensive new software. It can be as simple as a manual describing your processes. The important thing is that it fits your needs. The key is to have documented procedures that demonstrate how your organization conducts due diligence and disclosures.

Many companies already have risk assessment and due diligence processes in place that can be adapted to meet EUDR requirements. At Peterson Solutions we work with our clients to develop bespoke processes and procedures that outline step-by-step processes for conducting due diligence and preparing the required disclosures.

Transparency in the supply chain: The central challenge

Perhaps the greatest challenge of EUDR compliance is achieving the required level of supply chain transparency. Currently, many companies lack full visibility of their entire supply network, a gap that must now be filled.

The regulation requires detailed geolocation data of the land where raw materials were produced. Specifically, the polygonal coordinates (not just GPS points) of the crop plots. This requires close collaboration with suppliers.

Establishing strong relationships with suppliers must be an immediate priority. This is especially important because non-EU suppliers are not legally bound by the EUDR, but their cooperation is essential for companies to which the Regulation applies.

Some commentators even expect the EUDR to radically change traditional purchasing patterns. For example, commodities such as palm oil or soybeans, which were previously purchased in transit, may now require upfront documentation and verification before a purchasing decision is made.

Risk-based verification strategies

EUDR follows a risk assessment approach that requires companies to demonstrate that they have conducted due diligence and that the risk of deforestation and non-compliance with local regulations is negligible.

For companies with numerous suppliers, it makes sense to develop a risk-based verification protocol. This could involve different verification approaches depending on the risk profile of the supplier:

for certified materials from reliable sources, documentary verification may be sufficient.
for medium-risk suppliers, remote verification processes might be adequate
For high-risk sources, on-site audits may be necessary.

This tiered approach allows companies to concentrate resources where the risk is greatest, while maintaining the same level of risk.

This tiered approach allows companies to concentrate resources where risk is greatest, while maintaining compliance across all supply chains.

Technology solutions for compliance

While not all companies need sophisticated software, the volume of data required for EUDR compliance may make digital solutions the easiest option for many companies.

In terms of mapping requirements, technical tools are likely to be needed to properly record and manage polygon coordinates. In addition, companies must retain evidence of their due diligence for five years, creating significant documentation requirements.

Several technology solutions are emerging to support EUDR compliance, including platforms for documentation sharing, record keeping and mapping requirements. Peterson Solutions, for example, has developed technology solutions that can be especially valuable for companies with complex supply chains.

Competitive advantage through early adoption

Despite the extended deadline, companies should use this additional time wisely. Those that proactively demonstrate compliance can gain a significant competitive advantage in the marketplace. As buyers begin to prioritize suppliers that can provide the necessary documentation, early adopters will have a distinct advantage.

With potential penalties for non-compliance including forfeiture, market access restrictions, procurement and funding restrictions, and fines of up to 4% of annual turnover, the stakes are high. By taking practical action now, companies can not only ensure compliance, but also contribute to the vital global effort to combat deforestation.

For more information on how Peterson Solutions can help you comply with the EUDR, ckick here