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Due Diligence: Challenges and Opportunities for Timber Compliance with EUDR
How can timber companies best prepare for EUDR?
Published June 18, 2025
Asharita D'Silva
Expert@Era of We
EUDR is set to transform several industries when it comes into effect at the end of 2025. The timber industry is included in EUDR and as such, must adapt to meet the demands of the regulation. As a major industry in the EU, ensuring compliance in timber companies is of utmost importance.
In this article, we explore the impact of timber and wood on the European economy, the major differences between EUDR and past regulations, and the opportunities and challenges timber business will face when meeting the requirements of this legislation.
The Role of Timber in EUDR
Timber and wood products are a major part of Europe’s economy across the continent, accounting for around 7% of the EU’s GDP. The wood and forestry sector is a major source of income and jobs across the EU and is one of the major imports among EU countries as well as a major export outside the EU. Apart from economic significance, forests are an important environmental and cultural aspect of Europe as a whole.
While timber is a major economic sector, it cannot be ignored that logging activities in Europe and around the world are a significant driver of global deforestation and a major source of increased global greenhouse gas emissions. Tackling these effects is a major objective of EUDR, which aims to reduce the environmental impact of agricultural commodities including timber and wood products.
EUDR vs EUTR: Key Differences
EUDR is often thought of as a successor to EUTR (EU Timber Regulation), and these legislations share several similarities as well as a few key differences.
Broadly, both regulations cover timber and other wood products, but EUDR has a wider scope including other agricultural commodities. EUDR will essentially replace EUTR once it comes in effect and has a more expansive list of compliance requirements. In addition, both regulations have a common goal of reducing deforestation and promoting environmental sustainability.
The key differences between EUDR and EUTR start with the scope of the regulations and extend to what products are and aren’t covered. EUDR is focused on reducing overall deforestation, legal or illegal, whereas EUTR is focused only on reducing illegal logging.
In addition, while both legislations require Due Diligence records, EUDR has more requirements for traceability and transparency than EUTR, which is more focused on proof of legality rather than traceability to the source.
Understanding the differences between EUDR and EUTR is vital for meeting the compliance mandates of EUDR and ensuring that the objectives of the regulation are carried out as intended.
EUDR Requirements for Timber and Wood Products
For industry leaders and decision-makers, EUDR introduces a strategic inflection point. Timber and wood product operators must now go beyond legality and ensure that all materials entering or leaving the EU market are verifiably deforestation-free.
From a compliance standpoint, the regulation mandates that companies submit a Due Diligence Statement (DDS) to a centralized EU database before placing timber products on the market or exporting them. This statement must confirm that thorough due diligence has been conducted and that the risk of deforestation is negligible.
A critical shift from previous legislation is the requirement for geolocation data linked to the exact plots where timber was harvested. This geospatial traceability allows for real-time monitoring and remote verification by authorities, and it significantly raises the bar for transparency.
For procurement and ESG teams, this means rethinking supplier engagement strategies and ensuring all tiers of the supply chain can meet these documentation and traceability requirements. For C-suite executives, the reputational and legal risks tied to non-compliance demand clear oversight and investment in sustainable sourcing systems.
Building a Due Diligence System for Timber
Establishing a robust and audit-ready Due Diligence Statement (DDS) is no longer optional —it is central to regulatory compliance, ESG performance, and corporate resilience. There are three core pillars to an effective DDS under EUDR:
- Information Collection: This includes detailed product and supplier data, country of origin, geolocation of harvesting areas, and documentation of legal compliance.
- Risk Assessment: Companies must assess the deforestation risk associated with sourcing regions, governance environments, and supplier practices.
- Risk Mitigation: If risks are identified, businesses must take tangible steps—such as excluding non-compliant suppliers, conducting third-party audits, or requesting additional evidence—to reduce exposure to acceptable levels.
For compliance and procurement teams, this means operationalizing risk assessment protocols, implementing scalable data management solutions, and ensuring documentation is verifiable and up-to-date. Executive leadership must ensure that these systems are fully resourced and integrated into broader ESG and supply chain risk frameworks.
Challenges for Timber Operators
EUDR introduces operational and strategic challenges that affect nearly every function of a timber-related business.
Procurement teams will face increasing pressure to map and verify the origins of raw materials—particularly in complex, multi-tier supply chains. For processed or composite wood products, determining the source of each component may be a significant hurdle, requiring new levels of supplier cooperation and technological intervention.
Compliance officers must navigate a far more granular regulatory landscape, with tighter enforcement mechanisms and greater legal exposure. Traditional approaches based on legality alone will no longer suffice.
Managers must align environmental risk monitoring with supply chain practices and sustainability targets, ensuring that deforestation risks are not just assessed but integrated into the company’s materiality analysis and ESG disclosures.
C-level leaders will need to ensure these challenges are met with proactive governance, cross-functional coordination, and investment in systems that enable traceability, auditability, and strategic agility. The reputational and financial costs of non-compliance—and the potential first-mover advantage for companies that lead—cannot be overstated.
Best Practices for Successful EUDR Compliance
For timber operators seeking to meet EUDR requirements while turning compliance into a competitive edge, several best practices are emerging:
Invest in Traceability Tech
Implement supply chain mapping tools, satellite monitoring, and digital platforms that facilitate traceability to the plot level. These technologies reduce risk and provide the transparency demanded by regulators, investors, and consumers.
Embed Compliance into Procurement
Update procurement policies and supplier contracts to include EUDR-specific requirements, including the obligation to provide geolocation data and legal harvesting documentation. Use these moments to strengthen supplier relationships and build resilience.
Leverage Cross-Functional Collaboration
Align procurement, legal, ESG, and IT functions under a common due diligence strategy. This collaborative approach is critical for building a system that is both efficient and defensible under audit.
Train and Communicate
Ensure that internal teams are continuously trained on EUDR expectations and processes. Clear communication, both internally and with supply chain partners, can reduce friction and improve accuracy. Era of We conducts workshops that can help your business stay ahead of the training curve.
Lead with Sustainability
View EUDR not only as a regulatory obligation but as a sustainability opportunity. Transparent sourcing, forest-positive commitments, and credible data can differentiate your brand and build long-term trust with stakeholders.
For executives and managers alike, early action and integrated strategy will be key to turning EUDR compliance from a burden into a strategic advantage.
Jumpstart your EUDR compliance strategy with our workshops- contact us at pim@eraofwe.com to find out more and get a free demo.
About the author
Asharita D'Silva
Join me in discovering the wonderful world of coffee! As a writer, coffee is my fuel and newfound passion. I love writing about new coffees, sustainability, and coffee culture around the world. I'm always discovering new things about coffee and the industry, which I share with the great community here at Era Of We.
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