EUDR

What it is

The EU Deforestation Regulation (Regulation (EU) 2023/1115, as amended by Regulation (EU) 2025/2650) prohibits placing on the EU market, or exporting from the EU, specific commodities and products derived from land that was deforested after 31 December 2020. Operators and traders must conduct due diligence demonstrating that their products are deforestation-free and have been produced in compliance with the relevant country-of-production legislation. The regulation covers seven commodity categories: cattle, cocoa, coffee, palm oil, soy, wood, and rubber, along with derived products made from these commodities.

For the fashion industry, the directly relevant commodities are cattle (for leather) and rubber (used in footwear outsoles). Cotton, viscose, lyocell, wool, and silk are explicitly outside EUDR scope. The regulation establishes a country benchmarking system classifying countries as low, standard, or high risk for deforestation; this classification determines the intensity of due diligence required. The original enforcement date of December 2024 was postponed by amendment; large operators now face compliance from 30 December 2026.

Who it affects

EUDR distinguishes between "operators," companies placing regulated products on the EU market for the first time, and "traders," companies subsequently handling the same products in the supply chain. Both categories have due diligence obligations, though traders can rely on operators' due diligence statements if the original operator is EUDR-registered. For fashion specifically, leather importers and brands sourcing leather directly from tanneries are operators; retailers purchasing leather goods from EU-based brands are traders.

The size differentiation uses the EU SME definition: fewer than 250 employees and either annual turnover not exceeding €50 million or balance sheet not exceeding €43 million. Most fashion brands selling leather goods in the EU are large operators by this definition. Non-EU fashion brands exporting leather or rubber-containing products to the EU must ensure their products meet EUDR requirements; the due diligence obligation falls on the EU importer if the exporter is outside the EU.

Key economic implications

Credible EUDR compliance for leather requires geographic traceability of cattle, identifying the farm or ranch where the animal was raised and confirming that land was not deforested after December 2020. For brands sourcing leather from Brazil, Argentina, or other countries with complex, fragmented cattle supply chains, this traceability requirement is operationally demanding and may require third-party verification services or engagement with supply chain intermediaries such as abattoirs and tanners who have not historically tracked geolocation data for their cattle suppliers.

The commodity risk differentiation introduced by the country benchmarking system will create market segmentation in leather supply chains. Leather from countries classified as low risk requires lighter due diligence than leather from standard or high-risk countries. This will incentivise brands to source from European or certified-low-risk origins, potentially increasing competition for European tannery capacity and driving price premiums for verifiably compliant leather.

For footwear, natural rubber outsoles are within EUDR scope. Natural rubber is primarily produced in Southeast Asia: Thailand, Indonesia, Malaysia, and Vietnam. Brands sourcing natural rubber outsoles must ensure their rubber supply chains can demonstrate deforestation-free status with the required geolocation precision. Given that synthetic rubber is increasingly available as a substitute, EUDR compliance costs may accelerate the already-occurring shift from natural to synthetic rubber in fashion footwear.

Where things stand

Regulation (EU) 2025/2650 amending the enforcement timeline was published in the Official Journal on 23 December 2025. Large fashion brands sourcing cattle leather or rubber for the EU market have until 30 December 2026 to be fully EUDR-compliant, meaning due diligence systems must be operational, not merely in planning. The Commission's country benchmarking classification, which determines due diligence intensity by sourcing country, was expected in 2025 but has faced delays. Brands sourcing from standard-risk countries, the default classification for any country not yet benchmarked, must apply standard due diligence regardless of benchmarking timeline.

Official sources

• Regulation (EU) 2025/2650, Official Journal 23 December 2025 — https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202502650