On May 4, 2026, the European Commission officially released the final simplification package and supporting implementation rules for the EU Deforestation-free Products Regulation (EUDR), clarifying that the regulation will be fully mandatory by December 30, 2026.
Since the official adoption of EUDR in 2023, excessive compliance costs and complex supply chain traceability requirements have been the main pain points for global export enterprises.
This simplification package is a major adjustment made by the EU after extensive consultations with global enterprises and national governments.
According to official EU calculations, these measures will reduce the total annual compliance costs for enterprises from the originally planned 8.1 billion euros to 2 billion euros, a 75% reduction, while fully retaining the core forest protection objectives of the regulation.
I. In-depth Interpretation of Four Core Simplification Measures
1. Submission Obligations Significantly Focused: "One Submission, Whole Chain Applicable"
The previous draft required enterprises at all links of the supply chain to submit independent due diligence statements, resulting in multiple repeated submissions for the same product, which not only increased administrative costs but also frequently caused information inconsistency issues.
After this adjustment, only upstream operators who first place products on the EU market need to submit Due Diligence Statements (DDS). Downstream manufacturers, traders and retailers do not need to submit repeatedly, but only need to save and pass on the unique reference number of the upstream statement, which is expected to reduce more than 80% of enterprises' paperwork.
2. Special Burden Reduction for SMEs with an Additional 6-Month Grace Period
The previous regulation treated all enterprises equally, causing many SMEs to be forced to exit the EU market due to inability to bear high compliance costs.
This package clarifies that micro and small primary operators with fewer than 50 employees and annual turnover below 10 million euros only need to submit a one-time simplified statement, obtain a unified submission identifier and use it with product circulation, with a maximum validity period of 3 years.
Meanwhile, SMEs get an additional 6-month grace period and will officially be subject to the regulation from June 30, 2027.
3. Precise Optimization of Product Scope, Focusing on High-Risk Core Categories
The draft explicitly excludes finished leather products such as shoes, clothing and bags, retreaded tires, product samples, non-commercial packaging materials and second-hand goods from the regulatory scope, while adding instant coffee and some palm oil derivatives to the control list.
The EU stated that finished leather products have low correlation with deforestation and extremely high traceability difficulty. Excluding them allows regulatory resources to be concentrated on primary product links directly related to deforestation, improving law enforcement efficiency.
4. Simplified Processes for Low-Risk Countries with Mutual Recognition Mechanism
For products imported from countries recognized as "low-risk" by the EU, enterprises can submit a due diligence statement once a year instead of per batch.
Currently, the EU has initially identified 12 low-risk countries and regions including Canada, Australia and New Zealand, and will dynamically adjust the list according to each country's forest protection situation.
In addition, the EU has established a unified national legal database and certification system mutual recognition mechanism to further simplify the risk assessment process.
II. Key Compliance Action Recommendations for Enterprises
Although compliance costs have been significantly reduced, the core requirements of EUDR have not been relaxed, and the penalty for violations remains unchanged, with a maximum fine of 10% of the product value and a ban on related products entering the EU market.
Enterprises should make full use of the remaining 19-month window to complete the following work in advance:
● Conduct a comprehensive supply chain survey, draw a complete supply chain map, and identify high-risk links and suppliers
● Prioritize cooperation with suppliers who have established traceability systems and obtain complete origin and production data in advance
● Deploy digital supply chain management tools to realize real-time tracking, storage and sharing of data
● Establish standardized compliance management processes and conduct regular internal compliance audits
● Closely follow the subsequent implementation rules issued by the EU and the specific implementation requirements of each member state
III. SKYCO2 Compliance Service Support
SKYCO2 specializes in EU sustainable development regulation compliance. Relying on a professional policy interpretation team, rich global supply chain service experience and a self-developed digital technology platform, we provide export enterprises with full-process customized EUDR services.
Our services cover real-time policy interpretation, supply chain traceability system construction, due diligence report preparation, compliance management system establishment and employee training.
We will help enterprises accurately grasp policy requirements, achieve compliance at the lowest cost, successfully break through EU green trade barriers and expand global markets.