The EU Deforestation Regulation (EUDR ) is coming into effect, and companies across Europe are facing a fundamental change. It is not just more paperwork or a narrow environmental issue. The EUDR changes the way companies manage data, share information and collaborate with suppliers. It will affect everyone who imports into, exports from or trades selected commodities in the EU — from wood to coffee and cocoa to beef and rubber.

It is crucial for company management to understand that EUDR is not just about complying with legislation. It is an intervention in the functioning of the entire supply chain , which will not be possible to manage without digitalization .

Why is the EUDR being created and what is its purpose?

The European Union wants to slow the loss of the world's forests and reduce pressure on natural resources. It is also responding to consumers' growing desire for transparency: where a product comes from, who made it and whether its production does not harm the environment.

The EUDR therefore introduces the obligation to document the origin of each shipment of seven selected commodities and products made from them: wood, coffee, cocoa, rubber, beef, soy and palm oil.

The key is that the regulation does not say “be more sustainable”, but “ prove it with transparent data” . And this is what fundamentally changes the rules of the game.

What do companies need to be able to prove?

In order for a company to place a commodity on the EU market, it must be able to provide evidence for each individual shipment or batch :

1) Geolocation origin

The specific location where the commodity originated — often with accuracy down to a polygon or GPS point.
It is not enough to know “from Brazil” or “from Indonesia”. It is necessary to prove that the land in question has not been damaged by deforestation after 12/31/2020 .

2) Batch data and traceability

Every step in the chain must be traceable. In other words, at any point in the chain it must be possible to prove where the product came from and that it has not been mixed with another, unverified batch .

3) Due diligence statement

The company must be able to demonstrate in electronic form that:

• has access to all necessary data,
• assessed the risks,
• adopted control measures,
• and is responsible for the accuracy of the data.

EUDR affects more companies than you think

The regulation directly affects large companies (250+ employees and more than €40 million in turnover). But it doesn't end there.

The big players have an obligation to obtain data. But if they don't get it from their suppliers, they can't bring the product to market. In practice, this means that EUDR:

• It will also affect medium and small businesses if they supply to larger customers.
• It covers the entire B2B ecosystem , regardless of size.
• It will create pressure for uniform standards and digital data exchange .

For smaller businesses, it will often not be about the legislation itself, but about business necessity - anyone who does not provide data will not be a relevant partner for large customers.

How will the supply chain change?

EUDR brings a change that will not be solved by an email or a new Excel spreadsheet. Companies will have to:

• Share more data than ever before – a complete product data trail will become a business requirement. Companies that don’t work with batches, geolocation, or digitized documentation today will feel this the most.
• Ensure auditability and trustworthiness – Regulators will demand verifiability. Data will need to be consistent, immutable, traceable, and integrated across systems. This is a major challenge, especially for companies that have processes fragmented across different systems and departments.
• Automate data flow – Without automation, it will be impossible to send, match, and verify dozens or hundreds of batches. From this perspective , digitized platforms for electronic data exchange will be essential.

The EUDR is coming into effect, be prepared in time

Many managers still consider EUDR as a distant or irrelevant topic. However, the reality is different. Efficiency is approaching and controls and sanctions will gradually increase. Large companies are already actively collecting data from their suppliers, and those who are not prepared will lose customers.

So how should we think about EUDR and how should we prepare?

• EUDR is not an “ecological agenda”, but a new data standard in supply chains.
• It concerns not only large but also small companies that are part of the B2B ecosystem.
• Companies will have to share more data, manage it better, and most importantly, digitize the entire system.
• Without automation and integration of processes, it will not be possible to fulfill obligations.