The EUDR, the European Union’s new regulation 1115/2023 on deforestation-related products, which came into force on 29 June 2023, is expected to have its full application on 30 December 2025 for medium/large companies, and on 30 June 2026 for micro and small companies, recalling how this regulation repeals or replaces the EUTR, EU 995/2010, created mainly to combat the trade in illegally harvested wood, while the EUDR has a much broader scope not only concerning wood, but also other forest products or derivatives.
The introduction of this new instrument will consequently have considerable implications in the field of luxury packaging, where materials such as premium paper, special cartons, wood inserts and other wood-related materials are widely used, so it will be essential in order to fall within the parameters required by the European Union that products reflect these three main points.
- Deforestation-free: raw materials must not come from deforested or degraded areas after 31 December 2020.
- Legally compliant: production must respect the environmental and forestry laws of the country of origin.
- Traceable: the company must be able to prove the geolocation of raw material collection areas.
In the very frequent case of importing luxury packaging or components thereof from China, the world’s largest global producer, to the European Union, the main obligation introduced by the EUDR for the importing company on the EU market, be it a supplier or end user, can therefore be summarised in the preparation of a complex Declaration of Conformity, also called Declaration of Due Diligence, which must be filed in the EUDR information system of the EU before placing the product on the market, where clear documents must be widely included to prove what is required by the three main points above.
If these provisions are not complied with, to the extent that the declaration is not supported by what is required, or even not entered into the system at all, the product may not be placed on the EU market and, if done, will be liable to withdrawal with sanctions including fines, prohibition of sale, exclusion from public tenders, confiscation of goods, and more.
It is clear that while the burden of proof of what is required by the new EUDR lies with those who import the product, in this case China, it will be crucial that companies from that country adapt to meet the new demands for transparency and documentation, and in this sense, the various suppliers will have to provide in particular solid proof of origin of wood, paper, leather and more, with the added complication that if these raw materials come from provinces or areas subject to recent deforestation or forest degradation, it may become much more complicated to legally export to the EU.
Inevitable, among other things, is an increase in costs and time due to the administrative complexity of obtaining certifications, satellite or geographic verifications, legal documents, and external audits, which is why the initial entry into force of the new EUDR regulation has been postponed exactly one year from the original date, but the newly introduced concept of ‘deforestation-free’ will certainly be a very strong argument for brands, especially luxury brands, to use as a competitive advantage in view of the ever-increasing need to enhance sustainability, but at the same time a further guarantee of reliability and seriousness for Far Eastern production, especially from China.
All in all, the EUDR represents a strict but indispensable regulation, in a historical context represented by an ever-increasing need for environmental sustainability, which can become a strong marketing lever for companies that will be able to present themselves to consumers as pioneers, an aspect that especially in the luxury sector should further increase the perceived value of the brand that can no longer be measured only by aesthetic exclusivity, but also by responsibility, without neglecting a definitive guarantee of transparency, especially with regard to Chinese productions.
