With the EU Deforestation Regulation (EUDR), the European Union has created an instrument to protect forests worldwide and to reduce greenhouse gas emissions. The objective is to ensure that certain commodities such as cocoa, coffee, palm oil, soy, rubber, and wood and paper products are only placed on the European market if they are both deforestation-free and legally produced.
The classification of country benchmarks into “low risk,” “standard risk,” and “high risk” determines how strict the obligations for companies will be. Imports from low-risk countries are subject to simplified due diligence, whereas imports from high-risk countries are subject to significantly stricter requirements.
What is assessed in country benchmarking?
The benchmarks are determined by the European Commission for countries and regions, mainly based on:
- The extent of deforestation and forest degradation
- The extent of agricultural land expansion
- Production trends of relevant commodities and products
In addition, other criteria may be taken into account, such as concerns raised by ENGOs or the rights of indigenous peoples.
What follows from country benchmarking?
Enhanced checks by competent authorities for products from high-risk regions
For relevant products originating in high-risk countries or subnational regions, competent authorities are required to carry out enhanced checks.
Simplified due diligence for companies
Operators are exempt from fulfilling Articles 10 and 11 of the EUDR — i.e. risk assessment and risk mitigation — when the relevant commodities come from a country classified as “low risk.” This exemption also applies to provisions of the Regulation not directly linked to deforestation, such as the rights of indigenous peoples.
To demonstrate origin from the respective countries, however, the supply chain must be fully known and documented. Furthermore, companies must assess the risk that, due to the complexity of the supply chain, raw materials from other, higher-risk sources may have entered the product.
The due diligence information requirements under Article 9 remain fully applicable, including:
- (g) Conclusive and verifiable information that the relevant products are deforestation-free;
- (h) Conclusive and verifiable information that the production of the relevant commodities was carried out in accordance with the applicable legislation of the country of production, including all legal rights to use the production area for that purpose.
Criticism of country benchmarking
- The results of the published country benchmarks often have little to do with the actual risk of deforestation and appear primarily politically motivated. For example, among the few countries classified as “high risk” are Russia, Belarus, and North Korea — countries with limited deforestation issues.
- Emerging economies with widespread illegal logging (e.g. Republic of Congo, Papua New Guinea) are surprisingly classified as “low risk” — the same as EU Member States or the USA.
- Major trading hubs such as China, India, and Singapore also received a “low risk” classification and are therefore subject to reduced controls. Likewise, countries such as Turkey and Kazakhstan, which are frequently flagged for handling controversial timber, face less scrutiny under the benchmarking system.
- Where evidence of deforestation or forest degradation exists, operators must act even for supplies originating from “low-risk” countries. In practice, this means that using a digital tool that automatically detects deforestation could even put companies at a disadvantage, as it creates additional obligations.
- The “low risk” classification can easily lead to the misconception that the EUDR is irrelevant for such origins. However, the real challenge remains proving the supply chain in a credible way. Thus, the main workload under the EUDR — documenting and tracing the origin of commodities — remains. By comparison, carrying out an automated risk assessment of identified origins is relatively straightforward.
Conclusion
The classification of countries as “low risk” may reduce the scope of due diligence obligations, but it does not exempt companies from the core requirement: to plausibly and comprehensively document the origin of commodities. For complex supply chains, the effort remains significant.
Companies should therefore not rely solely on the country benchmarking system, but instead establish internal processes and leverage digital tools to ensure efficient and reliable traceability.
Moreover, if an operator has “relevant information” or “substantiated concerns” indicating that, despite a “low risk” classification, infringements of the EUDR principles may occur, then risk assessment and mitigation remain mandatory. Which information and which sources (e.g. ENGOs) will qualify for this purpose remains to be seen.
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