Navigating the EUDR - Implications for Irish and UK Businesses

As an EU Member State, Ireland must implement and enforce the EUDR, including applying the benchmarking system in its risk assessments and market surveillance.

Irish businesses importing from high-risk countries will face increased compliance burdens. This could prompt a shift toward sourcing from low-risk regions, potentially increasing costs or limiting sourcing options. Ireland’s reliance on small and medium-sized enterprises[2] means that many businesses may struggle to implement the required geolocation tracking and traceability tools.

Businesses with global supply chains will face both strategic and operational challenges: whether to continue sourcing from high-risk areas at greater compliance cost, or pivot to low-risk countries that may offer more streamlined market access. For sectors such as agri-food, retail, and timber, where profit margins are tight and sourcing contracts are long-term, these choices are not straightforward.

In addition, Irish enforcement authorities are expected to adopt a risk-based approach to compliance monitoring—placing greater scrutiny on products linked to high-risk countries. Businesses sourcing from such areas may experience more frequent audits, document requests, and possibly product holds at customs.

Although the UK is no longer subject to EU law, the EUDR will nonetheless shape the regulatory context for UK businesses exporting to the EU. These businesses will be required to conduct due diligence in line with the EUDR, and by extension, respond to the classifications established under the benchmarking system.

For UK exporters, this creates two key challenges. First, they will need to track and integrate the risk designations into their compliance systems, even as they continue to operate under the UK’s own (currently narrower) Forest Risk Commodities framework. Second, they may find themselves at a competitive disadvantage, facing higher transaction costs and market access barriers relative to EU-based peers sourcing from low-risk countries.

Whilst there is growing pressure on the UK Government to align more closely with the EUDR framework to avoid trade frictions and maintain access to the EU market, there is the possibility of regulatory divergence intensifying over time. Should the UK choose not to adopt an equivalent benchmarking system or remain aligned with EU designations, UK exporters may face higher costs and reduced predictability when trading into the bloc.

The introduction of the EUDR benchmarking system adds a geopolitical dimension to compliance strategy. Risk designations may be influenced not only by deforestation metrics but also by broader governance assessments, bilateral cooperation with the EU, and evolving enforcement standards.

Businesses must prepare to operate in an environment where a previously low/medium supply chain may suddenly become high risk following a regulatory update. This dynamic nature means companies will need to embed continuous monitoring mechanisms into their due diligence procedures and be ready to respond to reclassification events quickly.

The implications are particularly acute for businesses that rely on complex, multi-tier supply chains involving intermediaries or aggregators. Mapping these chains and obtaining reliable origin data is already challenging; under the benchmarking system, the compliance burden increases significantly when high-risk classifications apply.

To mitigate these risks, companies could:

• Establish internal alert systems to track updates to the Commission’s benchmarked risk list.
• Build flexibility into sourcing arrangements, including contractual provisions that allow for rapid shifts in suppliers if a risk classification changes.
• Negotiate robust contractual safeguards with upstream partners to allocate the burden of compliance and liability.
• Explore the use of traceability technology (such as satellite data and blockchain) to meet enhanced due diligence requirements when sourcing from standard or high-risk jurisdictions.

The EUDR and benchmarking system marks a significant shift in how environmental compliance will be assessed and enforced across supply chains. While it aims to streamline enforcement and reward responsible sourcing, it also introduces volatility and risk - particularly for companies trading across jurisdictions or sourcing from regions with complex deforestation dynamics.

For Irish businesses, aligning sourcing strategies with the benchmarking classifications will be essential to manage costs and reduce enforcement exposure. For UK exporters, the system represents a new layer of external regulation with direct implications for EU market access.

Above all, this is not a passive regulatory change. The benchmarking system will evolve, and with it, the risk landscape for international trade in forest-linked commodities. Businesses may want to act now to embed responsiveness, flexibility, and legal clarity into their compliance models.

For further guidance on navigating the EUDR, including supply chain risk assessments, contractual strategies, and regulatory engagement, please get in touch.