The European Union’s Regulation on Deforestation-Free Products, or EUDR as it’s now commonly called, was formally adopted in April 2023 following the draft agreement reached in November 2022. It represents, by most measures, one of the EU’s most ambitious regulatory efforts to curb deforestation linked to commodity imports. Palm oil, soy, beef, and cocoa are at the core of this legislation, though it is hard to imagine that the scope won’t eventually expand to other commodities. Policymakers and trade experts alike have debated its likely impact, not only on producers but on the large and complex supply chains that feed Europe’s demand for these goods. The discussion, to be frank, often circles back to the same unresolved tension: how to balance environmental protection with trade flows that, for better or worse, sustain millions of livelihoods across producer countries.
One of the most striking features of the EUDR is its emphasis on corporate due diligence. Companies placing these commodities on the EU market will now have to prove that their products are not linked to deforestation or forest degradation after December 31, 2020. This isn’t merely a documentation exercise. The regulation anticipates that firms will deploy geolocation data, traceability systems, and supply-chain verification protocols robust enough to withstand regulatory scrutiny. And, one suspects, scrutiny from civil society as well, which in some cases will be even more unforgiving.
Global retailers, in particular, are facing what could well be described as a data challenge as much as a compliance one. The sheer volume of land-use information that needs to be gathered, processed, and reported is daunting. To keep pace with regulatory expectations, they will need to set up data pipelines capable of tracking land-use change across multiple geographies. This means integrating open satellite imagery sources, like those offered by the Food and Agriculture Organization (FAO) and NASA, into their monitoring routines. The technical hurdles here are significant. For many companies, it will require building new internal capabilities—geospatial analytics is not a core strength for most retailers—or working with third-party providers that can process this imagery and translate it into usable risk indicators.
But even where the technical solutions exist, the question of interpretation lingers. What, precisely, counts as evidence that a given shipment of soy or cocoa is deforestation-free? Satellite imagery can confirm that land cover hasn’t changed over time. It can, in theory, identify incursions into forested areas. But matching that data to individual supply contracts or shipments is another matter. There’s also the problem of temporal mismatch—deforestation events may have occurred years before the land was converted for agriculture, complicating assessments of causal linkages.
Retailers, meanwhile, are being encouraged—some might say compelled—to begin publishing deforestation-risk reports on a quarterly basis. These reports are expected to show not just aggregate figures, but meaningful detail about supply-chain exposures, mitigation actions, and areas of ongoing concern. The drafting of such reports, while perhaps seeming straightforward on paper, has proven anything but in practice. Firms are grappling with what level of granularity is appropriate, how to present uncertainty where data is incomplete, and how to structure disclosures in ways that satisfy regulators without exposing themselves to unnecessary legal or reputational risk.
There is also an evolving discussion, still very much unsettled, about whether these reports should include forward-looking risk assessments or focus solely on past and current data. The regulation hints at both, but leaves room for interpretation, and different retailers appear to be taking different approaches. Some are adopting a more conservative stance, limiting themselves to verifiable historical data; others are experimenting with predictive models, attempting to flag areas where future deforestation risk is highest based on land-use patterns and economic drivers.
The technology underpinning these efforts is advancing rapidly, but not uniformly. There’s no shortage of platforms promising to integrate FAO and NASA satellite data, provide automated alerts, and generate compliance-ready reports. Yet many of these tools are still being refined, and their outputs vary in quality and reliability. Retailers, in short, are often left stitching together multiple sources, with no single system providing a complete solution. This patchwork approach has, in some cases, resulted in inconsistent reporting and challenges in demonstrating compliance across jurisdictions. It is a reality that policymakers should keep in mind as they assess the initial wave of company disclosures under the EUDR.
What’s becoming apparent is that the regulation, while clear in its ambition, is catalyzing a broader transformation in how supply chains are monitored and disclosed. The requirement to map deforestation risk to specific products and shipments is forcing retailers to build a level of visibility they have never needed before. For many, this represents a profound cultural shift, as well as a technical one. And while some firms are making genuine progress, others remain in the early stages of this transition, cautiously navigating the regulatory landscape and working to piece together the necessary data flows.