The European Union Regulation on Deforestation-free Products (referred below as ‘EUDR’) (Regulation (EU) 2023/1115) marks a significant milestone in the EU's ongoing efforts to combat deforestation and forest degradation globally. This regulation replaces the EU Timber Regulation, extending the mandatory due diligence requirements to cover a broader range of commodities.
EUDR: Ensuring Deforestation-Free Timber Products in the EU
Under EUDR, it will be prohibited to place or make available relevant commodities, like cattle, cocoa, coffee, oil palm, rubber, soya and wood, or relevant products that contain or have been made using relevant commodities, on the EU market, and export them from the EU unless:
they are deforestation and forest degradation-free;
they have been produced in accordance with the relevant legislation of the country of production; and
they are covered by a due diligence statement (DDS).
UPM Timber’s Commitment to EUDR Compliance
UPM is in full preparation to ensure the compliance by 30th December 2025. The aim of the regulation is to secure that the use of forests as a raw material is transparent throughout the value chain and that the forest is used in a responsible way. At UPM, we are deeply committed to sustainable forestry practices, and we support the regulation’s overall targets.
EUDR also imposes requirements on businesses, such as due diligence and risk assessments as well as ensuring the information flow in the value chain. To align with the EUDR, UPM Timber has a dedicated project team for a comprehensive assessment of our operations from sourcing to the customer end to meet all regulatory requirements and to ensure that the required data is available to our customers within the required timeframes subject to the delivery of the final instructions by the EU Commission.
EUDR implementation at UPM Timber
The chart below describes the basics of EUDR implementation in UPM Timber. The supplier of wood or other relevant commodities provides the first Due Diligence Statement (later DDS) including geolocation information to Traces and gets associated reference numbers (REF) from the system. UPM Timber includes all relevant reference numbers contributing to the raw materials received in their own DDS. After delivering the DDS, UPM Timber receives a reference number and forwards it to customers when placing products on the market.
- EU TRACES = EU information system, where operator or non-SME trader need to provide a due diligence statement (DDS) and where corresponding REF numbers are produced
- REF = reference number and verification number. EU TRACES system will produce a corresponding reference number that will be shared further down the supply chain.
The process also involves verifying due diligence statements from suppliers and verifying suppliers have adequate due diligence systems in place, ensuring traceability and compliance across the supply chain.
Frequently asked questions on EUDR
Please Note: This Q&A briefing is only meant to provide UPM’s current understanding and interpretation related to the EU Deforestation Regulation. It is not to be considered as legal advice, a binding position statement, nor is it a full representation of the Regulation’s requirements. The reader should seek out guidance from the EU directly or from a third-party expert when determining the full impact of the regulation on their own business activities.
Yes, the delivery note is the earliest phase we can provide EUDR reference numbers to customers.
Not at this stage. There are differences between levels of risk depending on the country, in terms of how the authorities will audit the supply chains, but it seems unlikely there are plans to allow any simplifications that would change the way we are planning to implement the regulation.
No, our intention is that you will receive only EUDR Reference Numbers with your deliveries.
Potentially the SMEs (Small & Medium Enterprises) in the value chains of non-SME Operators need to follow the EUDR obligations of the non-SME Operators, to support their customers’ Due Diligence obligations. We assume that the SMEs would also be able to forward the Reference Numbers they have received from the previous operators further in the supply chain.
Firstly, PEFC & FSC are voluntary whereas this EUDR is an EU regulation that is a requirement to operate. Secondly, the main difference is the ‘live’ nature of the EUDR. The due diligence information must be connected to specific geolocations as far as is technically possible. The PEFC & FSC due diligence systems in place do not require each batch of timber delivered to a customer to contain reference numbers that can be linked through the Traces System to information regarding the specific location/s that are responsible for a specific batch of timber.
It is our intention that we will be compliant with the EUDR. The regulation prohibits the entering of timber into the EU market without this compliance, and we fully intend to implement its requirements, despite the ongoing challenges and technical issues that are still being addressed.
No, there is no intention to stamp the packages at this stage, as the other options that connect these to other information, via the delivery notes, invoices, etc. appear to be the best way to do this.
The requirements are outlined in the Regulation under Annex II.
We will have more than one option available for receiving and sending the data, such as via printed /emailed PDF, DOCX, XML and CSV. Reference numbers will be included in delivery note, invoice and packing list. We are planning to add the information to our customer portal MyUPMTimber during 2025 if it is seen useful by our customers.
There are still various options available, and we will consider customer feedback such as this when deciding the final ways in which we can facilitate this information flow efficiently and effectively.
Despite the additional compliance costs, there is no intention to directly add an ‘EUDR surcharge’ to timber. This is a cost that must be absorbed by the whole industry, in terms of putting timber into the EU market.
Potentially – it depends if you are exporting the timber to or from the EU yourself or if your product (or your customers’ products) will eventually enter the EU market. If you are not yourself acting as the exporter to or from the EU and all your market is outside the EU, then you will not have any EUDR-related obligations.
One batch is defined as one delivery unit. Several batches can have the same raw material origins during one production day.
We have developed a way of tracing the wood as it arrives at the mill wood yard. The end products of an individual batch can consist of several different deliveries since one delivery includes several different log grades. Due to the conditions in the storages the logs need to be used within a certain timeframe. Therefore, it is possible to say from which deliveries the raw material of a certain batch of timber is originating from.
Packages are identified by number on package label and each package’s reference numbers can be found on delivery note.
Currently all the logs used in Timber production are coming from Finland and the supplies are operated by UPM Forest.
The time of harvest (related to ‘time of production’ requirements within the Regulation under Article 9 ‘Information Requirements’) will be recorded by the wood producer via their own due diligence process, and the resultant EUDR numbers will be the information passed to the next operator, including UPM Timber. Evidence kept downstream from wood suppliers will be in the form of EUDR Reference Numbers from up the supply chain.
It depends on the product in question. If the initial timber product is produced in the EU, leaves the EU, and re-enters as a refined product, but has no additional non-EU timber or other covered commodities added to it, then this would be relatively straight forward, in that the EUDR Reference Numbers required will have been provided by UPM Timber when sold to the customer.
If other timber from outside EU or other commodities covered by the regulation are included in the resultant product/s, then they would need the relevant geolocations to be added to the Due Diligence Statements that the downstream producer will need to provide into the EU Traces System.
The land can be legally cleared for agriculture to cultivate crops that are not in the scope of the regulation. However, the wood from that clearing cannot be placed on the market as wood as a commodity is in the scope of the regulation.
Please seek out for guidance from the EU directly or from a third party when determining the full impact of the regulation to your business activities.