EU Deforestation Regulation: Steps for Irish businesses to ensure compliance in 2025

The EU Deforestation Regulation (EUDR), formally known as Regulation (EU) 2023/1115, is a landmark EU-wide effort aimed at reducing deforestation and forest degradation. The regulation mandates that commodities linked to deforestation, such as cattle, timber, soy, palm oil, coffee, cocoa, and rubber, must be certified as "deforestation-free" to be placed on or exported from the EU market. Irish businesses involved in agriculture, forestry, and international trade will be significantly affected as these commodities play a key role in many sectors of the Irish economy.


While the EUDR is an EU-wide regulation, Irish businesses can access local resources for guidance and support in implementing the new compliance measures. Organisations such as the Department of Agriculture, Food and the Marine and Enterprise Ireland are key bodies that provide relevant updates and support services for businesses preparing for these regulations. These agencies are well-positioned to offer advice tailored to the Irish market and help companies navigate compliance with the EUDR.


Timeline for Compliance

Originally, the EUDR was set to take effect on 30 December 2024 for large companies, with SMEs having until 30 June 2025 to comply. However, based on recent feedback from global and EU stakeholders, the European Parliament and Council have approved a 12-month extension to these deadlines. As voted on November 14th, the deadlines will be moved to 30 December 2025 for large companies and 30 June 2026 for SMEs. Despite this extension, businesses are strongly advised to begin preparations immediately to avoid any last-minute disruptions.

In addition to the extended compliance deadlines, the European People’s Party (EPP) has proposed a series of amendments to the legislation. One notable amendment to the EUDR: the creation of a “no-risk” category for countries. This new classification joins the existing categories of low, standard, and high-risk countries. Nations classified as “no risk”—defined as those demonstrating stable or increasing forest area development—will face significantly less stringent compliance requirements. 

However, this proposal, though securing the support of the Parliament was rejected by the Council. 

There now begins a number of trilogue discussions between the Parliament, the Council and the Commission in the search for a consensus position on the EUDR legislation. If no agreement is reached, the default position will be that the EUDR will be implemented in full on Jan 1st 2025 – though this is seen as being an unlikely outcome.

The European Commission is tasked with finalising the country benchmarking system, which includes the new “no-risk” classification, by 30 June 2025. Until this system is implemented, all countries will be treated as standard-risk, requiring full due diligence.

In the meantime, Irish businesses should prepare for compliance by taking advantage of local resources such as those provided by the Department of Agriculture, Food and the Marine, which will align its guidance with the final EU deadlines. Staying informed through these official channels will ensure that Irish companies are well-prepared once the regulations are finalised. 


Obligations for Businesses: Compliance and Due Diligence

Businesses placing regulated commodities on the EU market, known as operators, bear the primary responsibility for ensuring their products meet the EUDR’s deforestation-free requirements. Compliance involves implementing a robust due diligence process, which includes gathering detailed information on the origin of the commodities, assessing the risks of deforestation, and mitigating those risks where necessary.


Due Diligence Statement Submission

A key part of compliance is the submission of a due diligence statement to the Deforestation Due Diligence Registry, a centralised online platform managed by the EU. The Registry has been fully operational since November 6th, allowing businesses to begin submitting their due diligence statements. Authorities will review submissions to ensure compliance, and businesses will be held accountable for the accuracy of the information provided. Companies should prepare for this requirement as part of their broader compliance strategy.


Due Diligence Components

The due diligence process is broken down into three essential components:

  1. Information Gathering: Businesses must collect detailed data on where and how the commodities were produced, including geolocation data for the land used.
  2. Risk Assessment: Businesses must assess the likelihood of deforestation in their supply chain based on this data.
  3. Risk Mitigation: If a risk is identified, businesses must implement mitigation measures, such as gathering additional documentation or conducting third-party audits to ensure the supply chain is deforestation-free.

 

Risk Assessment and Mitigation Strategies

The risk assessment process is a critical part of ensuring compliance with the EUDR. Irish companies need to evaluate their supply chains using several factors to determine the potential for deforestation risks, including:

  • The country of origin of the commodity.
  • The risk of deforestation or forest degradation in the region.
  • Potential issues surrounding indigenous land rights or conflicts over land use.
  • Broader governance issues like corruption or document falsification.

Recent guidance from the European Commission clarifies key definitions under the EUDR, such as what constitutes forest degradation, and provides more specific instructions for businesses. These clarifications are important for Irish businesses to refine their risk assessment processes and align them with EU expectations.

 

Simplified Due Diligence for Low-Risk Countries

For commodities sourced from low-risk countries, businesses may benefit from simplified due diligence requirements. Under this process, companies can avoid more rigorous risk assessments and mitigation measures if they can demonstrate negligible risk of deforestation. However, the list of low-risk countries will not be published until June 2025, meaning that all countries will be treated as standard-risk until that time.

This means that Irish businesses must initially prepare to conduct full due diligence until more information about low-risk classifications becomes available.

 

Implications for SMEs and Supply Chain Management

While the EUDR imposes comprehensive compliance obligations, SMEs benefit from a lighter regulatory burden. Unlike larger operators, SMEs are not required to conduct full-scale risk assessments and mitigation processes. Instead, their primary responsibility is to collect and maintain key supply chain data, such as the names and addresses of suppliers and customers.

Irish SMEs can access support through Enterprise Ireland, which offers resources to help businesses digitise and streamline their supply chain monitoring efforts. Ensuring supply chain transparency will not only help meet regulatory requirements but also provide a competitive edge in a market where sustainability is increasingly valued.

 

Penalties for Non-Compliance

The EUDR includes strict penalties for businesses that fail to comply with the regulation. These penalties include:

  • Fines of up to 4% of annual EU turnover based on the value of non-compliant products.
  • Confiscation of non-compliant products or revenue derived from them.
  • Temporary exclusion from public procurement and EU funding opportunities.

With such significant penalties, Irish businesses must ensure their supply chains comply with the EUDR. The Department of Agriculture, Food and the Marine will be actively involved in enforcement efforts, ensuring that businesses in Ireland meet their obligations.

 

How can an advisor help you prepare for EUDR?

In times of regulatory change, having a knowledgeable advisor can be critical to ensuring your business navigates new requirements with confidence and clarity. With the introduction of the EU Deforestation Regulation (EUDR), the complexities of compliance, due diligence, and supply chain transparency can feel overwhelming. An experienced partner can help you anticipate challenges, adapt to new standards, and integrate regulatory compliance seamlessly into your operations.

BDO understands the evolving regulatory landscape and the pressures that come with it. Our team offers tailored, practical support to help you meet these challenges head-on, ensuring you remain compliant while safeguarding your business interests. We support you and your business through different approaches, including: 

  • Training and knowledge transfer: We ensure your team is fully equipped with the knowledge and skills required to understand and comply with the EUDR, providing clarity on how the regulations affect your specific business operations.
  • Supply chain risk assessment: Our specialists work closely with you to assess potential risks within your supply chain, identifying areas that may need further evaluation and helping you develop robust mitigation strategies.
  • Comprehensive due diligence support: From gathering essential data to developing and executing risk mitigation plans, we guide you through each stage of the due diligence process, making sure your compliance efforts are thorough and accurate.
  • Liaison with National Competent Authorities (NCAs): We assist you in maintaining clear and effective communication with NCAs, ensuring your compliance efforts meet regulatory expectations and addressing any concerns that arise.

Partnering with BDO means having a trusted advisor by your side, committed to helping you not only navigate the intricacies of the EUDR but also thrive in a changing regulatory environment. Together, we can ensure your business remains resilient, proactive, and well-positioned to meet future sustainability goals.

 

Next Steps for Businesses

To prepare for the EUDR, Irish businesses should:

  1. Review commodity codes to determine if they trade in regulated goods.
  2. Determine their role in the supply chain to understand their obligations.
  3. Start mapping supply chains and gathering data for due diligence.

Although the final approval of the extended deadlines is still pending, businesses should not wait. Early preparation will ensure that companies avoid disruptions and remain compliant once the regulation is fully enforced.

 

Conclusion: Preparing for a Deforestation-Free Supply Chain

The EUDR marks a crucial step in global efforts to reduce deforestation and its related environmental impacts. Irish businesses are at the forefront of this transition and should act now to ensure compliance. By adopting proactive measures and leveraging the expertise of specialists like our team at BDO, companies can not only meet the regulatory requirements but also demonstrate leadership in sustainable trade practices.


Unsure how the EUDR will affect your operations? Speak to our experts today for insights and customised solutions.

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References

European Commission Press Release: Extra 12 Months of Phasing-In Time for EUDR
European Parliament News: EUDR Compliance Deadlines Extended
EU Deforestation Regulation Guidance: Regulation (EU) 2023/1115
Department of Agriculture, Food and the Marine: Forestry Division Resources
Enterprise Ireland: Sustainability Initiatives
Forest Stewardship Council: FSC Certification
Roundtable on Sustainable Palm Oil: RSPO Certification