The EU Deforestation Regulation (EUDR) covers cattle, cocoa, coffee, palm oil, rubber, soya and wood/paper products identified on a customs tariff code basis.
The EUDR sets out obligations incumbent on businesses related to the importation, distribution within the European Union market and export from the EU market of products falling within its scope. These include the collection of specific information on the relevant products, assessment of the information, and submitting a due diligence statement.
The EUDR was originally scheduled to enter into force on 30 December 2024. However, in the autumn of 2024, the European Union decided to defer its application until 30 December 2025.
In the autumn of 2025, the question of whether a further postponement was necessary arose once again. After lengthy consultations and debates, the European Parliament finally confirmed on 17 December 2025 that a further one-year postponement of the EUDR was necessary. Accordingly, under the current legal framework, the EUDR is now expected to enter into force on 30 December 2026.
Furthermore, the European Parliament adopted certain proposals to simplify the obligations under the EUDR and to narrow the scope of products covered by the Regulation.
Another development is that the European Court of Justice (CJEU) has rendered a judgement in a Hungarian preliminary ruling procedure in relation to the EU Timber Regulation (EUTR), which is considered the predecessor of the EUDR.
Under the provisions of the EUTR, as under the EUDR, due diligence must be exercised in relation to the respective products. In its judgement, the CJEU examined a substantive aspect of the due diligence framework, namely whether a parent company may carry out due diligence obligations in place of a subsidiary that would otherwise be subject to those obligations. The CJEU agreed with the NÉBIH (administrative body mandated as the Hungarian EUDR authority) that it is not acceptable for the parent company to exercise due diligence instead of the subsidiary.
Due to the postponement of the EUDR, affected economic operators have another year to implement the necessary processes to comply with the requirements of the EUDR.
It is important to note that the implementation of necessary EUDR processes should be carried out in line with the revised EUDR provisions and the legal developments concerning the due diligence.
Finally, in light of the ongoing pressure on supply chains, it is advisable to approach EUDR preparation as a potential savings assessment that may help identify cost optimization opportunities in areas such as VAT, the Chips Tax, EPR, and customs duties.
KPMG experts are ready to assist with the identification of EUDR obligations and the implementation of related procedures.
