The European Union Deforestation Regulation (EUDR), one of the world’s most comprehensive legislations to curb tropical deforestation, will take effect at the end of December 2025. Since its adoption in 2023, debates over its implementation and effectiveness have been loud and persistent — in some part influenced by misunderstandings and misinterpretations of the regulation.
Some claim the requirements are unclear or impossible to meet, especially for smallholders, while others fear the regulation will disrupt trade or place heavy burdens on businesses.
These concerns surfaced most recently in the European Parliament, where a vote in early July objected to the EUDR’s country benchmarking system, creating opportunities to further delay implementation and press for simplifying the law. The EU Commission is now gathering feedback on how to simplify a broad swath of environmental legislation and reduce administrative burdens, allegedly without compromising environmental standards — a process that could impact how the EUDR moves forward.
Despite the challenges, governments, companies and smallholders worldwide are showing that EUDR compliance is not only possible — it is already underway. Building on our previous analysis of why the EUDR is a necessary regulation to tackle deforestation linked to commodity supply chains, this article focuses on the practicality of compliance and highlights concrete steps being taken to prepare.
What Requirements Apply to Companies Under the EUDR?
Under the EUDR, companies must prove that products linked to deforestation or degradation after Dec. 3, 2020, are not entering or leaving the EU market. Companies must also ensure that products have been produced in compliance with the relevant laws of the country of production and are covered by a due diligence statement. To demonstrate that they meet these conditions, the regulation requires that companies establish and implement a three-step due diligence system.
To comply, the information collected must include: a description of the products (including common name and full scientific name), the quantity being placed or exported from the EU market, the country of production, the contact information of suppliers as well as the geolocation of all plots of land. For any plot of land over 4 hectares (except for cattle), digital shapes on a map that outline the exact boundaries of a production area called polygons must be provided instead of simple geographical coordinates. All of this information will need to be compiled into a “due diligence statement” that will be submitted through the EU Information System of the Deforestation Regulation.
To support companies and other supply chain actors in complying with the EUDR, the EU has published a series of resources including an official guidance document as well as an FAQ, factsheets, a myth-buster and videos. The EU has also set up coordination platforms for EU member state authorities in charge of enforcement of the EUDR and has established mechanisms for information sharing with different types of civil society, producer country and private sector groups.
Companies and supply chain actors can also learn from the test inspections conducted by the Netherlands Food and Consumer Product Safety Authority earlier this year. Inspectors found that while companies collected the required supply chain data, many fell short on two important steps: assessing risks and providing information documenting mitigation measures. Digital platforms such as the ITC Deforestation Free Gateway, Global Forest Watch Pro or the UN Food and Agriculture Organization’s WHISP tool can support data collection and risk screening, but they cannot replace a company’s responsibility to evaluate and document risks. In a sense it is like preparing for a financial audit: companies need to keep records of risk assessments, mitigation measures and sourcing decisions to assess if a company is chosen for verification. The authority did not specify a particular spatial resolution or data source to comply with the no-deforestation requirement. Hence, instead of debating whether high-resolution spatial imagery is better than open access data for compliance with the EUDR, companies should focus on reviewing the guidance from this test run and applying the lessons to strengthen their internal controls.
Public Sector Initiatives Are Advancing in Producer Countries
Malaysia has taken concrete steps to align its palm oil sustainability standard — the Malaysian Sustainable Palm Oil (MSPO) — with the EUDR. A joint assessment by the European Forest Institute and MSPO compared the standard’s data framework to EUDR requirements and found alignment in areas like legality and deforestation cutoff dates, while also recommending solutions to gaps such as the lack of polygon-level geolocation for plots larger than 4 hectares. Earlier this year, the country also launched a new digital system, MSNR Trace, to trace natural rubber from plantations to end products and support EUDR compliance.
In Brazil, the Ministry of Agriculture and Livestock launched the Agro Brasil + Sustentável Platform to integrate official government data and market information to improve traceability for the production of its agricultural products, including soy and beef. While the platform is still under development, there is an opportunity to align it with the EUDR. At the state level, the public platform, SeloVerde, now available in major commodity producing states ― Pará, Acre and Minas Gerais, collects data from state and federal agencies to promote transparency and traceability of agricultural commodity supply chains. In Minas Gerais, the platform can help verify compliance with the EUDR requirements for soy, coffee, and forest plantations.
Ghana has recently launched the Ghana Cocoa Traceability System to track cocoa beans from farm to port to align requirements of the EUDR through collaboration with EU partners. The government also developed training programs for cocoa farmers and other supply chain actors to support the implementation of the new system and promote transparency in the supply chain.
Private Sector Actors Are Already Investing in Supply Chain Traceability
In May 2025, coffee producers in Honduras reached a major milestone toward EUDR compliance by exporting a 20.7-ton container of fully traceable, deforestation-free coffee from Lempira and Santa Bárbara. The shipment was enabled by an open-source digital public infrastructure that compiled production data and issued QR-coded IDs with geolocation information. This achievement is especially notable in a sector characterized by small farms and operators, where local cooperatives, processors and exporters came together with national and international partners to make it possible.
In Argentina, the industry platform VISEC (Vision Sectorial del Gran Chaco Argentino), brought together companies, government, civil society and other members of the supply chain to develop national traceability and certification systems for soy and beef. The platform monitors and verifies supply chains to ensure their production and exports meet both EUDR and local sustainability standards. In March 2024, VISEC issued its first deforestation-free product certificates for pilot shipments of soy meal destined for the European Union.
Global companies are also stepping up. Nestlé, one of the world’s largest food and beverage companies, has demonstrated its commitment to responsible sourcing and deforestation-free supply chains and remains steadfast in its support and compliance with the EUDR amid calls for its delay and weakening. The company aims to achieve deforestation-free supply chains for cocoa and coffee by 2025 by developing responsible sourcing requirements and leveraging geolocation data to map its commodity supply chains.
These advances show that progress toward EUDR compliance is happening across sectors and at different scales — from local cooperatives to national platforms to global companies. The diversity of approaches highlights how solutions are emerging at every level of the supply chain and show that compliance with the EUDR is feasible.
The Smallholder Debate
One of the most contentious issues in the EUDR debate is the role of smallholders. Critics often argue that smallholders are at risk of being excluded from EU supply chains due to the high costs of compliance and complex data requirements.
The reality is more nuanced. There is no universal definition of smallholder and definitions vary widely across countries and sectors — from land-size thresholds to labor arrangements. For example, in Indonesia, palm oil smallholders are defined as farmers who hold plantation areas below 25 hectares — equivalent to about 35 soccer fields side by side — a scale that would not be considered small in many other countries. In Malaysia, independent smallholders own or lease up to 40.46 hectares (around 57 soccer fields) and either manage the land themselves or employ workers. By contrast, in Vietnam, coffee smallholders cultivate less than 2 hectares. Discussions on EUDR compliance and smallholder impacts should take place in the context of specific commodities and geographies.
The representation of smallholders in supply chains also varies by commodity and country. In South America’s soy and cattle sectors, production, processing and trade are often dominated by large-scale producers and traders, including publicly listed companies worth billions of dollars. However, for commodities such as cocoa, coffee and rubber, smallholders can play a significant role, making their inclusion critical for EU-bound supply. Challenges remain in collecting sufficient information about smallholders in supply chains as they often act as indirect suppliers to EU exports.
Improving smallholder inclusion should not be a reason to weaken or delay the EUDR. On the contrary, accelerating support programs and partnerships now can help smallholders secure their place in global markets in the long run. Rather than excluding smallholders, the EUDR is pushing governments, companies and NGOs to accelerate inclusion and capacity-building programs. Initiatives like the Sustainable Cocoa Initiative, which aim to strengthen farmer livelihoods while promoting sustainable cocoa production in West Africa, demonstrate how regulation can drive both sustainability and equity.
A Regulation Rising to a Complex Challenge
The ambition of the EUDR is high — but so is the urgency of tackling the demise of the world’s forests. Innovation to meet its requirements is accelerating, with countries, companies, smallholders and other stakeholders already building and deploying systems showing that compliance is not only feasible, but also beginning to deliver on its core objective: keeping deforestation and forest degradation out of commodity supply chains.
The regulation is not perfect. However, it provides a useful framework to address a complex global challenge: how to ensure that production and trade do not destroy forests that are indispensable for tackling climate change, saving biodiversity and sustaining the livelihoods of hundreds of millions of people. The economic case is just as strong — the cost of inaction, from climate impacts to supply chain disruptions, will far exceed the short-term costs of compliance.
Challenges remain — especially around smallholder inclusion — but these are reasons to step up preparation efforts, not to delay or weaken the law. Reopening the rules now would risk undermining progress and wasting the substantial investments already made, thereby punishing those companies that have already set up compliance systems. Guidance from EU national enforcement authorities, such as the Netherlands’ report, show that compliance with the EUDR is not rocket science. Instead of seeking a perfect compliance system, companies should focus on strengthening their internal procedures and ensuring they document their due diligence processes and decision-making.