Challenges and Opportunities for Industry in Complying with the European Union Deforestation Regulation

Abstract

This research explores the challenges and opportunities faced by industries in complying with the European Union Deforestation Regulation (EUDR), a landmark policy aimed at eliminating deforestation from global supply chains. As environmental concerns and regulatory pressure intensify, industries, especially in agriculture and forestry, are tasked with ensuring that their products are deforestation-free. The study aims to identify the operational, financial, and strategic challenges industries encounter in aligning with these regulations, while also highlighting the potential benefits of compliance. A qualitative research approach was employed, utilizing semi-structured interviews with industry experts, policymakers, and business leaders, complemented by case studies from companies successfully navigating the compliance process. The findings reveal that industries face significant challenges related to traceability, high compliance costs, and complex global supply chains. However, those that invest in technology, such as blockchain and satellite monitoring, and engage proactively with stakeholders, are able to uncover opportunities for innovation, market expansion, and improved brand reputation. The research concludes that while the road to full compliance is fraught with obstacles, industries that view sustainability as a competitive advantage are better positioned for long-term success. The study contributes to the body of knowledge by providing actionable insights for industries and policymakers, offering a comprehensive understanding of the EUDR’s implications, and suggesting directions for future research on industry-specific support mechanisms and technological advancements in deforestation-free sourcing.