Presented by Dietmar Stoian at Pre-conference Workshop "Seeking to curb deforestation: Sticks, carrots, and their implications for agri-food and wood product value chains", Bonn, Germany, on 10 Sep 2025

1. EU Deforestation Regulation (EUDR):
Stick, carrot, both, or something else?
Dietmar Stoian
Pre-conference Workshop
"Seeking to curb deforestation: Sticks, carrots, and their implications for agri-food and wood product value chains"
Tropentag, hybrid conference
September 10, 2025
University of Bonn / ZEF, Bonn, Germany

2. Key Points of EU Deforestation Regulation (EUDR) (1)
1. Scope of commodities and products ➔ 7 commodities (cattle, cocoa,
coffee, oil palm, rubber, soya, and wood) and derived products
2. Deforestation-free requirement: not produced on land deforested
or degraded after December 31, 2020 (cut-off date)
3. Due diligence obligations: companies required to collect geolocation
(and other) data, assess and mitigate deforestation risks, and submit
due diligence statements
4. Compliance with local laws: production in accordance with country laws
5. Penalties for non-compliance: fines up to 4% of annual EU turnover;
confiscation of non-compliant products; temporary exclusion from
public procurement and funding opportunities

3. Key Points of EU Deforestation Regulation (EUDR) (2)
6. Implementation timeline: large and medium-sized enterprises:
30 December 2025; small and micro-enterprises: 30 June 2026
7. Impact on global trade: expected to be significant for global
commodity chains, particularly principal export countries
8. Concerns: potential economic impact on smallholder farmers and
administrative burden of compliance (transaction costs)
9. Risk-based country classification: low, standard or high deforestation risk
➔ determines level of scrutiny and due diligence required

4. EUDR- Country Risk Classification (May 2025)
Risk classification defines the extent of compliance checks:
• Low-risk countries: 1%
• Standard-risk countries: 3%
• High-risk countries: 9%

5. EUDR – Divergent views
Critics
▪ Traceability & data quality
▪ Legal and land rights complexity
▪ High costs of compliance
▪ Risks: market leakage, ecosystem
spillover, smallholder 'blind',
agroforestry 'blind'
▪ Limited institutional capacity
Advocates
✓ Targeting 'deforestation-free' trade
✓ Boosting sustainable agriculture
✓ Access to (premium) EU Markets
✓ Modernizing agricultural systems (digitalization)
✓ Job creation in Tech & Sustainability
✓ Leveraging donor support and investments
Beyond the Pros and Cons
▪ Combining ground truthing, remote sensing and AI ➔ National traceability systems
▪ Digital tools & Capacity development
▪ Land tenure clarification & forest zoning
▪ Negotiations with EU to avoid "high" or "standard" risk classification
▪ Voluntary sustainability standards and public-private platforms for sustainable commodity production

6. Thank you
d.stoian@cifor-icraf.org
Dietmar Stoian