The EU Deforestation Regulation (EUDR) takes effect on 30 December for large and medium-sized enterprises in scope, closing out a legislative path marked by two postponements over two years and a package of simplifications pushed through in response to business objections. Small and micro-enterprises get an additional runway: their obligations begin on 30 June 2027.

The regulation targets seven commodities that drive most deforestation globally: palm oil, soya, timber, cocoa, coffee, beef and rubber. EU companies that import, sell or export these commodities — and hundreds of derived products identified by specific customs codes — must demonstrate that goods do not originate from land deforested or degraded after 31 December 2020. They must also prove production complies with the laws of the country of origin.

The compliance instrument is a due diligence statement (DDS), uploaded to TRACES, the European Commission's online platform, before products are placed on the EU market or exported. The Commission puts the stakes in planetary terms: deforestation accounts for 11 per cent of global greenhouse gas emissions.

"By December," explains Fabio Favorido, partner and associate director of Nature and Climate Impact at BCG, "companies must have put in place the infrastructure to generate real-time mapping of suppliers and their geolocation, through a tried-and-tested internal process of data compilation and uploading. Because from the end of 2026, no shipment will be allowed to proceed without a due diligence declaration."

Final product list settled

The commodity scope itself has shifted. The product code list, amended several times, is now final. The latest revision in July — approved by the European Parliament and the Council of the EU in mid-September — brought instant coffee, certain palm oil derivatives including bar and flake soaps, and frozen beef tongues into scope. For these newly included products, the due diligence obligation applies only from December 2027.

The same revision cut items out. Raw bovine hides and leather are excluded, along with soya beans intended for sowing, certain rubber articles, and seats for aircraft and motor vehicles.

For Italian industry, the transparency exercise touches strategic segments of "Made in Italy": food, paper and wood-based furniture.

Simplifications shift the burden

In May, Brussels narrowed the scope and introduced further simplifications. Favorido insists these are substantive. "These are genuine measures, not merely cosmetic changes," he says. "The most significant change lies in the distribution of obligations along the supply chain: today, the burden falls on the upstream operator — that is, the party who first places the product on the EU market — who must submit the due diligence declaration."

Downstream operators no longer have to collect and pass on the reference numbers of their suppliers' declarations. A simplified, one-off scheme now covers small primary operators. The Commission estimates the combined measures will cut compliance costs by 75 per cent.

Counting the affected operators

No official aggregate figure exists for the number of Italian businesses covered as upstream operators. Favorido's cross-referencing of available data points to a plausible range of 25,000 to 30,000 companies. Around 24,400 of them sit in the timber and furniture sector, which has operated under the EU Timber Regulation — in force since 2013, building on the 2010 framework — and already carries traceability infrastructure. The remainder are spread across the other commodity sectors.

What happens next turns on execution. The 30 December application date for large and medium enterprises is the first hard milestone; the newly added product codes follow in December 2027, and small and micro-enterprises enter on 30 June 2027. From the end of 2026, shipments without a due diligence declaration will not proceed.