The European Union Deforestation-free Regulation (EUDR), adopted in June 2023 marks a turning point in global trade governance by requiring that certain key commodities sold on the EU market (including wood, rubber, soy, beef, palm oil, coffee, and cocoa) be demonstrably free from deforestation and compliant with producer country laws. Although targeted at EU-bound goods, the regulation’s influence is inherently global, with implications not only for producing countries but also for major processing and re-export hubs such as China.
China plays a central role in global supply chains for forest-risk commodities, both as the world’s largest importer and processor of raw materials and as a major exporter of derived goods to the EU. This report, commissioned by Fern, provides a detailed analysis of how the EUDR will impact China’s export-oriented trade, how companies are preparing and what support is needed for a supply-chain transformation.
Key findings include:
- Wood, rubber and leather products are the most significant sectors in China that will be impacted by the EUDR.
- Chinese industry is preparing for EUDR compliance in the face of other regulations on Environmental, Social, Governance criteria, China’s Dual-Carbon Commitment, and additional sustainability requirements, but has concerns, particularly about small and medium-sized enterprises.
- China lacks a clear policy stance on how to address deforestation in its supply chains.
- Supply chain traceability is the primary compliance challenge.
