New EU Deforestation-Free Regulation: What it will mean for obligated businesses and forest-risk commodities

On 29 June 2023, the European Union’s Regulation (EU) 2023/115 on deforestation-free products came into force, replacing the EU Timber Regulation (EU) 995/2010.

This new regulation is part of the EU’s broader commitment to minimising global deforestation, reducing greenhouse gas emissions, and addressing biodiversity loss. It introduces strict due diligence requirements for businesses involved in forest-risk commodities. But which businesses will be affected, what do they need to do, and which products fall under its scope?

Who is affected by the new regulation?

Under Regulation 2023/115, businesses across the EU that deal in specific forest-risk commodities are required to meet stringent due diligence obligations. The affected parties include:

1. Operators – Businesses that sell, import, export, or make available relevant products for processing or distribution. These businesses must submit due diligence statements when placing commodities on the EU market or exporting them.
2. Traders – Large companies that commercialise relevant products but aren’t directly involved in processing or distribution. Traders are also subject to due diligence requirements and must communicate within the supply chain to ensure compliance.
3. Small and Medium Enterprises (SMEs) – SMEs have similar due diligence obligations as operators. They need to submit due diligence statements, but where the product has already been subjected to due diligence earlier in the supply chain, they may use the previously submitted reference numbers.

Which commodities fall into scope?

The regulation focuses on several forest-risk commodities, aiming to ensure these products do not contribute to deforestation or forest degradation. Commodities include:

• Cattle
• Cocoa
• Coffee
• Palm Oil

Beyond raw materials, the regulation also applies to products derived from these commodities. For instance:

• Chocolate (derived from cocoa)
• Furniture (derived from timber or leather)
• Leather goods (derived from cattle)
• Printed paper
• Personal care products (derived from palm oil)

If a company deals in any of these commodities or their derived products, they must adhere to the due diligence requirements outlined by the regulation.

What do obligated businesses need to do?

The core of Regulation 2023/115 is the due diligence process, which requires businesses to ensure that the products they are sourcing do not contribute to deforestation or forest degradation. This means businesses must submit a signed Due Diligence Statement.

What must be included in a Due Diligence Statement?

A Due Diligence Statement must include the following details:

1. Operator information: Name, address, and Economic Operators Registration and Identification (EORI) number.
2. Product details: Harmonised system code, product description, trade name, and scientific name where applicable. The quantity of the product in kilograms (net mass) must also be included.
3. Geolocation: The exact geolocation of all plots of land where the commodities were produced. If a product includes materials from different locations, each plot’s geolocation must be included.
4. Country of production: Identifying the country where the commodity was produced is essential for transparency and traceability.

This robust due diligence process is designed to prevent any products that contribute to deforestation from entering the EU market.

When do businesses need to comply?

While Regulation 2023/115 is already in force, the European Commission has proposed a 12-month delay in the full implementation of the regulation.

If the proposal for delay is approved, these dates will shift to:

• 30 December 2025 for operators and traders
• 30 June 2026 for SMEs

This gives businesses more time to adapt their supply chains, implement due diligence measures, and ensure full compliance with the new rules.

What happens during the transitional period?

During the transitional period, businesses placing commodities on the EU market can submit verifiable evidence that proves the product, or its raw materials were placed on the market before the new rules come into effect. However, this is a temporary measure. Full compliance will eventually be required, so businesses must begin implementing robust due diligence processes as soon as possible.

Prepare for compliance with Valpak

Navigating these new requirements may seem daunting, but compliance is essential to avoid penalties and ensure your business remains competitive in the EU market. We are here to help. With years of expertise in regulatory compliance, Valpak can guide your business through the due diligence process, ensuring your supply chains meet the standards set by Regulation 2023/115.

Contact Valpak today to learn more about how we can help your business achieve compliance with the EU’s new deforestation-free product rules.