The EU Deforestation Regulation (EUDR) affects companies throughout the timber and wood supply chain in different ways, depending on their role, product, and timing. For large and medium-sized market participants, the requirements generally apply starting December 30, 2026; for micro and small market participants, they generally apply starting June 30, 2027. Special transitional provisions may also apply to certain timber and timber products, which is why the specific applicability should always be assessed on a product- and date-specific basis.
Basic Logic
The EUDR distinguishes, in particular, between market participants, downstream market participants, and distributors.
- A market participant (upstream operator) is a natural or legal person who, in the course of a commercial activity, places relevant products on the market or exports them, and who is not a downstream market participant.
- A downstream operator places relevant products on the market or exports them if they were manufactured using relevant products for which a statement of due diligence or a simplified statement has already been provided.
- A downstream operator ( trader ) is a person in the supply chain who is neither a market participant nor a downstream market participant and who makes relevant products available on the market in the course of a commercial activity.
Under the current regulations, downstream market participants and trader are generally not required to conduct a full due diligence process themselves or to submit their own due diligence statement. However, they must collect and store the information required under Article 5 and make it available to the authorities upon request.
Practical Examples from the Wood Industry (Scenarios)
Scenario: Forest owner sells roundwood
If a forest owner harvests timber and places the resulting roundwood on the EU market for the first time as part of a commercial activity, that person is typically considered a market participant.
For relevant products produced within the EU, the market participant is generally the person who distributes those products after they have been produced. However, the specific determination of roles may depend on ownership and the terms of the contract. The Commission’s guidelines expressly note that, particularly at the stage of production or harvest, it may be decisive who directly owns the product or how a contract governs the transfer of ownership.
Before placing the product on the market, the market participant must fulfill the due diligence requirements set forth in the EUDR.
These include, in particular:
- Collection of the necessary information and documents,
- Information about the relevant product,
- Country of origin or region of origin,
- Origin or geolocation, where required,
- Verification of the legality of production,
- risk assessment, if applicable,
- risk mitigation, if necessary,
- Submission of the required due diligence statement.
Market participants may place a relevant product on the market or export it only if, after conducting the required testing, there is no risk or only a negligible risk.
Special Case: Micro or Small Primary Producers:
A qualified micro- or small-scale primary producer is subject to a simplified procedure. Instead of submitting a regular due diligence declaration, the producer need only submit a one-time simplified declaration through the information system. Under the conditions set forth in the regulation, the producer may provide a mailing address in lieu of geolocation, provided that the address clearly corresponds to the geographic location of the parcels in question.
Scenario: A roundwood dealer delivers to a sawmill
The forest owner has already placed the roundwood on the EU market for the first time. If a roundwood dealer purchases this roundwood and resells the same relevant product to a sawmill without further processing, the dealer is generally trader.
He is not placing the roundwood on the market for the first time, but is making a product that has already been placed on the market available again. The trader must, in particular, collect and store information about its direct suppliers and its commercial customers. If its direct supplier is a market participant, the required information must also include the reference numbers of the statements of due diligence or the identification numbers assigned to the product.
Downstream market participants and trader must retain this information and make it available to the competent authorities upon request.
However, you must always:
- do not conduct its own full due diligence,
- do not submit a statement of due diligence of their own,
- does not generally need to verify again that the upstream due diligence requirement has been properly fulfilled.
Transportation is not trade
A carrier or freight forwarder that merely provides transportation or logistics services and does not hold any corresponding ownership or marketing rights to the timber is not a market participant or “ trader ” solely on the basis of the transportation. The Commission’s guidelines explicitly mention, for example, carriers, freight forwarders, and customs brokers.
Scenario: A sawmill processes roundwood into sawn lumber
The sawmill purchases roundwood that has already been placed on the market and processes it into sawn lumber. If the relevant products used have already been the subject of a due diligence statement or a simplified declaration and are used to manufacture another relevant product, this generally meets the definition of a downstream operator.
The guidelines explain in this regard that a downstream operator typically places a relevant product on the market that is classified under a new HS code and was manufactured using other relevant products for which a due diligence statement or simplified declaration has already been provided.
For traditional wood processing, for example, the distinction between roundwood and sawn timber is important.
Typical positions include:
- 4403: Raw timber/roundwood
- 4407: Wood, sawn or planed lengthwise, etc.
However, the specific tariff classification of each product must always be determined on a product-by-product basis.
As a downstream market participant, the sawmill generally does not conduct a new, full due diligence review solely because it processes roundwood that has already been inspected.
However, it must include the information required under Article 5 regarding:
- record and store information about its direct suppliers and its commercial customers.
- make them available to the authorities upon request.
Scenario: A laminated wood factory purchases sawn lumber
The laminated wood plant purchases sawn timber that is already on the EU market. Simply purchasing a product that has already been placed on the market does not automatically constitute a new, first-time placing on the market by the laminated wood plant. What matters is what happens to the product afterward.
If, for example, the sawn timber is processed at a laminated wood plant and subsequently used to manufacture another relevant product, which in turn is placed on the market or exported, the subsequent activity of the laminated wood plant is decisive for determining the role.
For the purposes of its operations, the company must collect and store the information required under Article 5 regarding its direct suppliers.
It is important to note that:
Under the current regulations, the EUDR does not require a complete repetition of the upstream due diligence process at every single stage of processing.
Scenario: A laminated wood factory produces and sells laminated wood
The laminated wood plant processes sawn timber that has already been treated in accordance with the EUDR into a new relevant wood product and subsequently sells it. Provided that the raw material was already the subject of a due diligence statement or a simplified declaration and the manufactured product is also a relevant product as defined in Annex I, this generally meets the definition of a downstream operator.
The specific CN/HS classification of the glued-laminated wood product must be determined on a product-by-product basis. Glued-laminated timber (GLT) or glulam may fall under heading 4418 in particular. The exact subheading may depend on the specific product and should not be determined solely based on the general product description.
As a downstream market participant, the laminated wood plant must, as a general rule:
- record and store information about its direct suppliers and its commercial customers.
- make them available to the authorities upon request.
Under the current Article 5 regulation, downstream market participants are generally not required to conduct a new full due diligence review or prepare a new DDS.
Please note the following:
A company may have different roles depending on the product and the specific business process.
The Commission Guidelines explicitly state that the classification as a market participant, downstream market participant, or " trader " must be assessed separately for each relevant product. An undertaking may therefore hold multiple roles simultaneously, depending on its position in the supply chain.
Transitional Provisions for Wood
Special transitional provisions apply to wood and wood products. For wood that was produced or harvested between June 29, 2023, and December 30, 2026, the rule is, in simple terms:
- If it is placed on the market before December 30, 2026, the relevant provisions of the EU Timber Regulation generally apply, provided the product is covered by its annex.
- If, on the other hand, it is placed on the market on or after December 30, 2026, the requirements of the EUDR generally apply.
- Timber and timber products harvested or produced on or after December 30, 2026, must comply with the provisions of the EUDR.
EUDR process in TiCom ERP
TiCom ERP continues to map the entire process and enables compliance with the requirements of the EUDR.
Disclaimer
This article is intended solely to provide general information and guidance on the EU Deforestation Regulation (EUDR). It does not constitute legal advice or individualized compliance guidance, nor does it replace the binding text of the relevant European legal acts or a review of a specific case by the competent authorities, legal advisors, or other appropriately qualified professionals. The content has been prepared with great care based on official sources available as of the date indicated. No warranty or guarantee is provided regarding the completeness, accuracy, timeliness, or applicability of the information presented to a specific set of facts. The legal classification of a company or business transaction may depend, in particular, on the specific supply chain, product classification, ownership and contractual arrangements, company size, origin of the goods, and other circumstances of the respective individual case. Legislation, delegated acts, implementing acts, guidelines, FAQs, country classifications, customs tariff classifications, and official interpretive practices are subject to change. Therefore, before making any operational, contractual, or legally binding decisions, the current legal situation and the specific individual case must be independently reviewed. The European Commission’s own guidelines explicitly state that they do not replace, supplement, or amend the legal obligations under the EUDR. They serve as a guide. Furthermore, the Commission notes that ultimately only the Court of Justice of the European Union can issue a binding ruling on the interpretation of the Regulation.
