Impact of the Implementation of the Deforestation Regulation on the Cosmetics Industry: A Challenge, but also an Opportunity
The European Union has taken a major step forward in the fight against imported deforestation by adopting the European Union Deforestation-Free Products Regulation (EUDR). This initiative aims to transform the way companies interact with supply chains by imposing strict standards regarding traceability and the environmental impact of raw materials. From December 30, 2025, companies will have to comply with progressive obligations, with an additional deadline of June 30, 2026, for small and medium-sized enterprises (SMEs). This regulation will be reviewed regularly, every five years from 2028, ensuring its continuous adaptation.
The Cosmetics Sector: A Major Strategic Challenge
The cosmetics industry is particularly affected by this regulation, as many common ingredients such as palm oil, cocoa, and soy are at the heart of the deforestation issue. These raw materials, often linked to deforestation, will have to meet strict requirements in order to be placed on the European market or exported.
Here are the main challenges that cosmetics brands will face:
- Enhanced Traceability: Geographic data must be accurate, verifiable, and constantly updated.
- Zero Deforestation criterion: No product shall originate from land deforested after December 31, 2020. For wood-based products, harvesting shall not cause forest degradation after that date.
- Compliance with Local and International Legislation: Compliance with the laws of the country of production, as well as global standards.
A Comparative Assessment of Countries: Who is at Risk?
Starting on June 30, 2025, the European Commission will establish a ranking of countries based on the risk associated with deforestation. Three categories will be defined: high, standard, or low. This ranking will be based on three main criteria:
- Deforestation and forest degradation rates.
- Expansion of agricultural land for the products concerned.
- Trends in raw material production.
Basic Products and Related Products: What Are the Requirements?
Products covered by the EUDR include essential raw materials such as cocoa, coffee, palm oil, rubber, soybeans, and wood. Any product derived from these raw materials must meet the following requirements:
- Zero deforestation.
- Compliance with the legislation of the country of production.
- Statement of due diligence certifying the conformity of the products.
Who is affected by the EUDR Regulation?
The operators (companies that sell or export products linked to deforestation) will have to implement a due diligence system to ensure the traceability and legality of their products. These companies will also have to publish an annual report on their compliance.
The small and medium-sized enterprises (SMEs) enjoy a certain degree of flexibility. They are not required to apply due diligence, provided that the products have already been subject to this process by other actors upstream.
The retailers will also have to collect and retain detailed information on their suppliers for five years, while complying with due diligence obligations, particularly for those that are not SMEs.
Key Steps in Due Diligence
Diagram taken from the official website of the Ministries of Territorial Planning and Ecological Transition
The implementation of a due diligence system is crucial to ensure that products sold are legal and do not contribute to deforestation. This process includes specific measures to ensure compliance with legislation and minimize environmental risks.
Annex II from REGULATION (EU) 2023/1115 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of May 31, 2023 on the making available on the Union market and export from the Union of certain commodities and products associated with deforestation and forest degradation, and repealing Regulation (EU) No. 995/2010 (Text with EEA relevance)
Severe Penalties for Non-Compliance
Failure to comply with these new obligations exposes companies to heavy penalties, such as:
- Substantial fines, proportional to the seriousness of the offenses.
- Confiscation of proceeds and profits.
- Temporary exclusion from public procurement.
- Damage to reputation, with a risk of losing consumer confidence.
Act now to ensure compliance and minimize risks!
The implementation of the EUDR represents a real opportunity for responsible companies to position themselves as leaders in the transition to sustainable practices. It also poses a challenge for those who are slow to adapt, risking both legal sanctions and a loss of credibility in the market.
Are you a cosmetics company and want to learn more about EUDR compliance?
Our experts are available to help you assess your supply chain, implement the necessary solutions, and ensure your compliance by the key deadlines of 2025 and 2026. Contact us today to discuss the concrete actions to be taken!
