EU Unveils Deforestation Risk Ratings

May 28, 2025

The European Commission has unveiled its new country risk classification under the EU Deforestation Regulation (EUDR), categorizing nations as low, standard or high risk based on their deforestation levels. This classification determines the level of due diligence required from companies importing such commodities as wood, cocoa, coffee, soy, palm oil and beef into the EU.

EUDR is a law passed by the European Union to prevent products linked to deforestation and forest degradation from entering the EU market. It requires companies to ensure that certain commodities — including wood — are sourced legally and deforestation-free.

The EUDR replaces the EU Timber Regulation (EUTR), which remains valid only for timber placed on the market before the EUDR took effect. The EUDR marks a major shift in how the EU addresses environmental responsibility in supply chains. Businesses must now trace and verify the origins of key commodities, ensuring they are free from deforestation and legally compliant with producer country laws.

Relevance to the U.S. Music Products industry

Many musical instruments (like guitars, violins, and pianos) are made of exotic wood. U.S. manufacturers and exporters selling to the EU must now trace and document the origin of their wood materials to prove they meet EUDR standards. Non-compliance could block access to the EU market, making this regulation crucial for music product businesses involved in international trade.  

EU Risk Classification System  

All 27 EU member countries have been labeled as low risk. Countries designated as high risk include Belarus, Myanmar, North Korea and Russia. The low-risk list also features non-EU countries, such as the U.S., Canada, China and Australia.

Despite these classifications, all companies placing products on the EU market must comply with the EUDR. This includes providing geolocation proof that products were not sourced from deforested areas. The regulation takes effect for medium and large companies on December 30, 2025, and for smaller businesses by June 30, 2026.

Guide to the EU Deforestation-Free Products Regulation (EUDR)

The EU Regulation on Deforestation-free Products (EUDR) aims to prevent deforestation and forest degradation linked to the production of specific commodities. It applies to both raw materials and derived products sold within or imported into the EU, requiring companies to prove their goods are legally produced and deforestation-free.

Covered Commodities and Products

Raw Materials:

  • Wood
  • Rubber
  • Cattle
  • Coffee
  • Cocoa
  • Oil palm
  • Soy

Derived Products:

  • Furniture
  • Chocolate
  • Leather
  • Beef
  • Other goods containing or made from the listed commodities

The regulation targets globally traded and consumed products to ensure they no longer contribute to environmental harm.

Due Diligence Obligations

To comply with the EUDR, companies must implement a thorough due diligence system, which includes:

  • Information Gathering: Collect detailed data on product origin, including geographic coordinates of the production land.
  • Risk Assessment: Evaluate the likelihood that products are linked to deforestation or forest degradation.
  • Risk Mitigation: If risks are identified, take action, such as commissioning independent audits or improving supplier practices.
  • Reporting and Record-Keeping: Publish annual reports on the due diligence system and retain all documentation for a minimum of five years.

Scope of Application

  • Product Range: Includes both raw and processed goods.
  • Geographic Reach: Applies to all relevant products, regardless of whether they are produced within the EU or imported.
  • HS Codes: Products covered are identified in Annex I of the regulation via Harmonized System (HS) codes.

Implementation Timeline

December 30, 2025 – Regulation applies to medium and large companies.

June 30, 2026 – Small and micro-enterprises must comply.