5 innovations desperately needed for EUDR compliance

EUDR compliance summary for global supply chains

• Europe leads efforts to eliminate deforestation with EUDR enforcement approaching
• Smaller businesses face tougher compliance challenges than well‑resourced industry leaders
• Public policy collaboration boosts traceability systems supporting producer country alignment
• Pre‑competitive corporate cooperation raises baseline standards across interconnected value chains
• Harmonised technology and innovative finance accelerate scalable deforestation‑free supply transitions

When it comes to wiping out deforestation from global supply chains, Europe is leading the charge. At least, it will be when the EU Deforestation Regulation (EUDR) is finally enforced. After two delays, the new law is due to come into play for bigger operators at the end of 2026, and half-way through next year for smaller ones.

Many of the big-name food companies are already prepared; they have the resources available to overcome financial hurdles on the path to regulatory compliance. But for smaller businesses and their suppliers, many still face an uphill battle.

Much-needed innovations can help ease EUDR compliance. “As companies move up the value chain, they will hit a policy or financial impediment,” explains Jack Hurd, head of the Earth Systems Agenda and executive director of the Tropical Forest Alliance at the World Economic Forum (WEF). Cross-sectoral collaboration can help “break down that bottleneck”.

“You transition from a one-on-one relationship between a company and its suppliers to a system-wide agricultural model change.”

But it’s not always the technological innovations that have the greatest impact. Here are five of the lesser-thought about disruptors that could move the needle on EUDR compliance – for all.

1. Innovations in public policy

When one thinks of game-changing, disrupting innovations, public policy isn’t necessarily what springs to mind. But if used to double down on EUDR’s intent and accelerate its execution, it could help industry better manage the regulation’s complexity.

Public policy can be developed in collaboration with trading partners, says WEF’s Hurd, through diplomacy, activation, and technical assistance facilities.

Examples already exist, coming from both producer countries and some of the major consuming nations. In Ghana for example, a major cocoa producer, the country has established a government-backed traceability system that follows cocoa from farm to port, enabling plot-level traceability that aligns with EUDR’s geolocations and due diligence requirements. In palm oil-producing Indonesia, too, efforts have been made to strengthen forest monitoring and traceability tooling to help suppliers meet the EU’s deforestation law requirements.

More government-backed initiatives like these would not just be welcome, but are sorely needed.

2. Game-changing corporate practices

From public policy to innovative corporate practices, the next disruptor on the list involves the breaking down of boundaries between competitors for the greater good.

WEF’s Hurd describes this as “pre-competitive consultation” among businesses; essentially companies working together on parts of compliance that don’t depend on beating each other on price or market share. This can help raise the baseline for meeting EUDR requirements – from traceability to geolocation, risk assessment through to documentation – without coordinating on competitive variables. What it’s unlikely to entail is price coordination; i.e. agreeing what businesses should pay for EUDR-compliant products.

Company collaborations already exist – the Consumer Goods Forum is a prime example – but other vertical collaborations can accelerate progress, suggests Hurd, referring to those that “go up and down the value chain”.

3. Innovative financial services

Complying with EUDR’s complex regulations doesn’t come without cost. For the big names in the business, whole teams have been resourced to ensure relevant products adhere to the new regulation. But smaller companies don’t always have the means. And where smallholders are involved, ensuring the right documentation passes through the supply chain can be a monumental task.

That’s why financial innovations can’t be overlooked. “We need innovative finance ways to lower the cost of capital, increase loan repayment terms, and perhaps even have grace periods built in,” explains WEF’s Hurd. “Different financial products can incentivise the transition from extensive agriculture – ‘clear and burn’ – to intensive agriculture using land in a more holistic and efficient way."

Just look to Brazil, a country that’s pledged to restore millions of hectares of deforested land under the Bonn Challenge. That’s a huge opportunity, both to boost productivity and ecosystem functionality, says Hurd. “That’s where innovative finance and policy must work together.”

4. High-impact action from civil society groups

Civil society groups aren’t exempt from the innovative action required. Ranging from NGOs to Indigenous people’s organisations and farmer cooperatives, civil society can play a major role in simplifying EUDR processes and tightening requirements over time.

And that’s incredibly important for business. They define the “guardrails”, as Hurd puts it, which could include how monitoring, verification and reporting can be set up for business ease.

Civil society groups can also help translate EUDR requirements into plain language. WWF is a prime example, developing a step-by-step EUDR guide for industry.

5. Technological innovation - but harmonised

And finally, we come to technological innovation. Although to date, most innovation efforts have centred around novel traceability platforms and next-generation geolocation tech, Hurd is unconvinced these innovations are the panacea many hope they’ll be. “Technology alone won’t solve this,” he stresses.

But of course, it can help. And even more so when the right technology is used with a harmonised approach. That’s what’s lacking from satellite and verification systems, says Henry Clifford, head of EU trade at coffee trader DRWakefield, who’s noticed that although satellite imagery is objective, its interpretation can be very subjective – particularly at low resolution.

“It’s astounding when you compare low-resolution open-source technology with very detailed imagery. With crude open-source systems, you might pass the test simply because it’s too blurry. There’s a massive difference.”

The answer? Harmonisation, suggests the trade expert. “Consistency in satellite technology would be a great step.”

What’s next for EUDR?

So, what are the next steps for business? The earliest industry will need to comply is 30 December 2026. At least for the big names, efforts are well and truly underway. FMCGs like Nestlé, Danone, and Ferrero, and multinational retailers like Aldi, are among those pushing for immediate enforcement; they’re ready, now.

Even without EUDR being legally binding just yet, it’s already changing global markets. “Some suppliers give an EU price and a rest-of-world price,” says DRWakefield’s Clifford. “There’s a three-tier market now – it’s definitely having an impact.“

Businesses that aren’t yet compliant will be using the coming months to get there. And for those that are, it’s a question of waiting to see if any changes to the regulation are made between now and the end of the year. There’s talk of instant coffee being added to the list of in-scope products, and if other changes are afoot, they’re expected to be proposed next month.

Change would not necessarily be welcome by the bigger names in the business. Aldi, for one, is clear in its view. “We are still waiting for guidance from the Commission, but potential further changes would not be welcome,” says Anke Ehlers, managing director of international sustainability at the retailer.

“Guidance is great, but changes would not be necessary now – after almost three years of preparation and a lot of investment. I don’t want any further change; it should go live as it is."