Impact of EUDR on Food & Dietary Supplements: A Guide

The EU Deforestation Regulation (EUDR) is an innovative initiative addressing one of today’s most pressing environmental concerns: deforestation. As global awareness of environmental challenges grows, the EUDR leads the EU's strategy to combat climate change and preserve biodiversity.

This regulation is particularly crucial for sectors reliant on agricultural goods, such as food and dietary supplements. In this blog, we will explore the EUDR in detail: its mechanisms, the products it covers, the importance of deforestation-free supply chains, and the challenges and opportunities that lie ahead.

What is the EU Deforestation Regulation (EUDR)?

The EU Deforestation Regulation (EUDR) is a robust law established by the European Union to eliminate deforestation associated with agricultural development. Its primary objective is to ensure that products available in the EU do not contribute to deforestation or forest degradation.

This regulation is aimed at enforcing stringent due diligence requirements on companies trading specific commodities, seeking to reduce the EU's role in global deforestation and advocate for sustainable land use practices.

Timelines for Implementation

The EUDR will be effective starting December 30, 2025. From that date, businesses operating within the EU will need to meet the new due diligence and reporting obligations specified in the regulation. Micro and small enterprises will have until June 30, 2026, to comply, providing them with additional time to adjust their operations accordingly.

Between the years 2026 and 2028, the European Commission (EC) will conduct an evaluation period to review the EUDR’s implementation and impact, making necessary adjustments. This transition phase is vital for companies to adapt their supply chains, begin due diligence, and ensure complete adherence to the EUDR before it becomes enforceable.

Commodities Covered by the EUDR

The EUDR targets commodities traditionally linked to deforestation, which include:

- Soy: Commonly found in food items, animal feeds, and dietary supplements.

- Palm oil: Ubiquitous in processed foods, personal care products, and cosmetics.

- Cocoa: Essential for producing chocolate and other confectionery goods.

- Coffee: A globally traded commodity with significant consumer demand.

- Wood and timber: Utilized in construction, furniture, paper, and packaging.

- Beef and leather: Often associated with deforestation in Amazon regions.

- Rubber: A critical raw material for tires, footwear, and medical devices.

The Role of Supply Chains in EUDR Compliance

Central to the EUDR are the principles of transparency and accountability within supply chains. Practically, companies importing or trading these commodities in the EU must source them from deforestation-free origins. A robust due diligence approach is essential, encompassing the tracking of raw material sources, assessing deforestation risks, and implementing effective risk management measures.

The EUDR requires businesses to establish comprehensive traceability systems to track commodities from their source to the end product. This involves gathering and validating extensive supply chain data, from initial producers to processors and exporters. Accurate documentation must be maintained, and periodic reports demonstrating EUDR compliance are required.

Challenges Presented by the EUDR

While the EUDR marks progress toward sustainable development, it presents significant economic barriers, particularly for food and dietary supplement companies:

- Supply Chain Complexity: Many companies operate intricate global supply chains, making it challenging to acquire precise data regarding product and raw material origins. These complexities pose hurdles to full EUDR compliance.

- Cost of Compliance: Developing due diligence systems, implementing tracking technologies, and undergoing third-party audits can be very costly, particularly for small and medium-sized enterprises.

- Supply Chain Disruptions: In response to EUDR requirements, companies may need to change suppliers and modify sourcing practices, leading to potential delays and increased logistics costs.

- Data Collection and Verification: Sourcing accurate commodity data and verifying that it is 'deforestation-free' can be difficult, especially in remote areas lacking infrastructure or enforcement.

Requirements of the EUDR

To successfully navigate the EUDR framework, companies must adhere to several requirements:

- Due diligence: Businesses must perform rigorous due diligence to confirm that their products are not linked to deforestation. This involves risk evaluations, data gathering, and risk mitigation strategies.

- Traceability: Companies must document the origins of commodities and maintain detailed records of their supply chain procedures to ensure integrity throughout production.

- Reporting: Entities are required to submit comprehensive reports showcasing EUDR compliance to EU authorities, as noncompliance may result in penalties.

- Third-party verification: Companies might need external validation of their due diligence efforts, adding another layer of accountability.

EUDR's Impact on the Food Industry

The EUDR is poised to significantly influence the food and dietary supplements sectors. Key ingredients such as palm oil, soy, cocoa, and coffee are now under intense scrutiny. Businesses are expected to implement traceability systems and submit due diligence declarations by December 2025 to demonstrate compliance with EUDR standards. This regulatory shift has increased operational expenses related to implementing tracking technologies, third-party audits, and potentially more expensive sustainable ingredients.

However, the EUDR also presents substantial opportunities for businesses. Companies that proactively align with the regulation can gain an edge over competitors by appealing to environmentally conscious consumers. By sourcing from deforestation-free suppliers or reformulating products to exclude at-risk ingredients, businesses can enhance their reputation and foster customer loyalty.

How Freyr Can Assist

At Freyr, we specialize in regulatory compliance and offer various services to guide clients through the complexities of EUDR. Our expertise encompasses:

- EUDR-focused Due Diligence Training: We assist clients in developing and refining due diligence protocols to meet EUDR criteria.

- Risk Assessment and Mitigation: Our team conducts thorough risk assessments and proposes strategies to strengthen compliance within your supply chain.

- Compliance Reporting: We support clients in compiling and delivering accurate compliance reports that fulfill EUDR mandates.

- Training and Support: We offer training sessions to equip your team with the skills necessary to ensure ongoing compliance and stay informed on regulatory changes.

Conclusion

The EUDR is reshaping the sustainability and deforestation strategies within the food industry. While it presents numerous challenges, it also offers a platform for businesses to demonstrate their commitment to sustainable practices. Freyr is dedicated to guiding you through the intricacies of regulatory requirements. With our extensive offerings in due diligence, risk assessment, compliance reporting, and training support, your organization can achieve EUDR compliance while actively contributing to global deforestation mitigation efforts.

With Freyr's expert guidance on the EUDR, dietary supplement manufacturers can navigate regulatory standards, enhancing their market presence in the EU and securing a competitive edge while fostering sustainable development. Immediate action is required to prepare your supply chains and ensure complete adherence to this critical