EUDR Regulation (EU) 2023/1115 after the December 2025 postponement: applicability to leather and cotton textiles + mandatory due diligence statement

What the EUDR prohibits — placing Annex I products on the market without a DD statement + timelines after the December 2025 postponement

Regulation (EU) 2023/1115 of the European Parliament and of the Council, known as the EUDR (European Deforestation Regulation), establishes a binding framework to curb deforestation and forest degradation driven by consumption in the European Union. Published in the Official Journal of the European Union on 9 June 2023, it entered into force on 29 June 2023. The regulatory core lies in the absolute prohibition on introducing, placing on, or exporting from the Union market raw materials and derived products that do not comply with three concurrent conditions set out in its Article 3: being deforestation-free, having been produced in accordance with the relevant legislation of the country of production, and being covered by a due diligence statement (Due Diligence Statement).

The material scope is strictly confined to the seven raw materials listed in Annex I: cattle, cocoa, coffee, oil palm, rubber, soy and wood, as well as a selection of their derived products. The definition of "deforestation-free" imposes a strict chronological requirement: the raw materials must have been produced on land that has not been subject to deforestation after the cut-off date of 31 December 2020. Likewise, in the case of products containing wood, the wood must have been harvested without inducing forest degradation after that date.

The original roadmap envisaged the applicability of the main obligations from 30 December 2024 for large operators. However, operational pressure, the immaturity of the IT control systems and international trade frictions forced changes to the timetable. The second formal postponement, approved by the Council on 18 December 2025, reshapes the compliance timeline. The new applicability requires full observance of the regulation on 30 December 2026 for large operators and on 30 June 2027 for micro-enterprises and small and medium-sized enterprises. This breathing space does not alter the dogmatic articles or the 2020 cut-off date; rather, it shifts the enforceability of the documentary proof.

The obligation falls on the operator, defined as any natural or legal person who, in the course of a commercial activity, places relevant products on the market or exports them. The ex ante control mechanism pivots on the Due Diligence Statement. Without its prior registration in the unified TRACES NT system, release for free circulation or export is blocked. By submitting this statement, the operator assumes full legal responsibility for the conformity of the product. This regulatory design shifts the burden of proof onto the private sector, eliminating presumptions of legality based on third-party certifications not validated by the Commission's information system.

Applicability of bovine leather to the textile sector — the cattle-farming → tanning → manufacturing chain

The intersection of the EUDR with the textile and fashion industry materialises mainly through leather of bovine origin. Although the regulation does not classify the textile industry as a unified block, Annex I breaks down the Combined Nomenclature (CN) codes that trigger the due diligence obligations. In the cattle category, the regulation captures not only live animals (CN 0102) and meat, but explicitly hides and skins as well. Within the regulatory perimeter are raw hides and skins (ex CN 4101), tanned hides and skins or "crust" not further prepared (ex CN 4104), and leather further prepared after tanning or drying, including parchment-dressed leather (ex CN 4107).

The traceability imposed requires reconstructing a supply chain characterised by opacity and fragmentation. The operational sequence runs from cattle farming (breeding and fattening), through the slaughterhouse and the intermediary or collector, to the tannery and, finally, the manufacturer of the leather garment or footwear. Article 9 of the EUDR requires collecting the geolocation of all establishments where the cattle have been kept. Unlike crops, where geolocation is tied to a polygonal land plot (for areas larger than 4 hectares), cattle require identifying the physical breeding location.

The textile sector faces a structural information asymmetry. A batch of tanned leather (CN 4107) placed on the EU market contains hides from hundreds of different head of cattle, processed in homogeneous batches (wet-blue) where the individual identity of the animal is often diluted. If a European fashion brand imports tanned leather from a third country to manufacture garments within the Union, it acts as an operator under the EUDR and assumes the direct obligation to submit the Due Diligence Statement, including the geospatial coordinates of all the cattle establishments of origin.

It is imperative to draw the distinction of the finished product. Annex I does not include CN chapters 64 (footwear) or 42 (leather manufactures and saddlery). This generates a dynamic of asymmetric applicability: the direct regulatory obligation under the EUDR falls on the operator who places the leather material specified in Annex I (such as CN 4107 leather) on the market. If a brand manufactures its bags outside the EU and imports them under CN code 42, the EUDR does not apply to it directly at customs for that finished product under the current wording of Annex I. Nevertheless, if the brand buys the leather (CN 4107) in Brazil, introduces it in Italy and manufactures the footwear there, it is directly responsible for the importation of the raw material. Brands not directly obligated still receive a massive cascade impact upstream, since their leather suppliers must comply with the requirements to lawfully market in the European area, altering the availability and cost of validated raw material.

Why cotton textiles are NOT in the original Annex I + the pending 2025 EUDR review

Cotton, the backbone raw material of the global textile industry, is excluded from the original Annex I of Regulation (EU) 2023/1115 published in June 2023. The initial omission responded to a regulatory efficiency analysis based on weighting the raw materials with the greatest direct impact on global deforestation driven by European consumption. The prior impact study prioritised palm, soy, wood and cattle, which account for the vast majority of imported deforestation. However, the exclusion of cotton is provisional and subject to a scrutiny mandate.

Article 34, paragraph 2, instructs the Commission to present, no later than 30 June 2025, an impact assessment addressing the need for and feasibility of extending the scope to other raw materials. Likewise, Article 34.2 provides for the assessment of extending the regulation to other natural ecosystems with high carbon stocks and high biodiversity value, such as grasslands, peatlands and wetlands. Cotton, given its intensive use of land and water, is anticipated to be one of the technical candidates in this review phase. Its possible inclusion is currently being intensely debated in European regulatory forums, but as of now there is no legal obligation under the EUDR to issue a Due Diligence Statement for cotton.

Faced with this temporary vacuum of public mandate (hard law), the textile industry is subjected to strong parallel pressure through private governance schemes (soft law). Standards such as the Global Organic Textile Standard (GOTS 7.0) and the Better Cotton Initiative (BCI) act as vectors of cascading contractual compliance. Fashion brands require certifications from their suppliers at Tier 1 (manufacturing) and Tier 2 (spinning/weaving) that retroactively force traceability down to Tier 4 (agriculture). GOTS 7.0, for example, imposes rigorous criteria of organic origin and tacitly prohibits the recent conversion of high-conservation-value ecosystems for agricultural purposes, operating through transaction certificates that document the volume of flow.

Nevertheless, there is a critical operational divergence between private governance and the EUDR standard. Standards such as BCI often allow chain-of-custody models based on mass balance, where certified material is physically mixed with conventional material, tracing only volume credits. The EUDR flatly rejects mass balance to demonstrate deforestation-free origin: it requires the physical and exact geolocation, at the land-plot level, of the origin of the raw material. This asymmetry means that, if cotton were to enter future extensions of Annex I, the traceability infrastructure of many private standards would prove insufficient to automatically validate the Due Diligence Statement in the TRACES NT system, requiring a drastic adaptation of the cotton sector towards models of strict segregation and on-site geospatial data capture.

Mechanics of the DD statement — TRACES NT + plot-level geolocation + assessment + mitigation

The EUDR compliance architecture is structured around a three-phase due diligence cycle that must be mandatorily documented in the Due Diligence Statement before any act of placing on the market. Article 8 of the regulation defines this process: information collection (Article 9), risk assessment (Article 10) and risk mitigation (Article 11).

Phase 1 (information collection) requires obtaining conclusive and verifiable data demonstrating the deforestation-free status and local legality. The technological core of this phase is geolocation. Annex II determines that the Due Diligence Statement must include the geographic coordinates of all the land plots where the relevant raw materials were produced. The coordinates must be expressed in latitude and longitude with at least six decimal places. For land plots of more than four hectares dedicated to the production of raw materials other than cattle, the geolocation must be provided by means of polygons with enough points to describe the exact perimeter. In the case of bovine cattle, the rule states that the geolocation shall refer to all the establishments where the cattle have been kept. All this information is uploaded to the information system established by the Commission (TRACES NT).

Phase 2 (risk assessment) requires the operator to analyse the information collected against the risk criteria of Article 10, such as the presence of forests, the prevalence of deforestation, the reliability of the information obtained, the risk of circumvention or mixing with products of unknown origin. The operator may only place the product on the market if, after the assessment, it concludes that there is no or only a negligible risk that the product is non-compliant.

Phase 3 (risk mitigation) is triggered if the assessment reveals a risk above negligible. Article 11 requires adopting adequate mitigation procedures to reduce the risk to a negligible level before placing on the market. These measures may include requiring additional information, carrying out independent surveys or audits.

The Due Diligence Statement, detailed in Annex II, summarises this process. It constitutes a formal declaration signed by the operator, assuming legal responsibility. Each statement registered in TRACES NT generates a unique reference number. SMEs (under the simplified regime deferred to June 2027) or downstream operators may reference the numbers of the due diligence statements already registered upstream to avoid duplication, but without exonerating themselves from their own verification responsibility. The system thus consolidates a network of documentary co-responsibility impenetrable to opacity.

Penalty regime + customs control + classification of high/standard/low-risk countries

The EUDR's coercive mechanism combines automated customs controls, selective risk-based scrutiny and a penalty regime of direct corporate severity. The country benchmarking system established in Article 29 stratifies risk at state or sub-national level into three tiers: high, standard or low. This classification, which the Commission must publish by means of implementing acts, drastically conditions operability. If a product comes from a low-risk country, the operator benefits from simplified due diligence (Article 13), being exempted from the obligations of assessment (Article 10) and mitigation (Article 11), provided that a negligible risk of circumvention is demonstrated. By contrast, high-risk origins trigger reinforced scrutiny by the competent authorities.

Customs control is integrated into the release procedure. Article 26 requires that the reference number of the Due Diligence Statement be made available to the customs authorities before release for free circulation or export. Through the electronic interface (EU Single Window Environment for Customs) connected to the TRACES NT system, customs verify the status of the statement. If the system flags an elevated risk, customs suspend release for a minimum of three working days (72 hours for perishable products) to allow inspection by the competent authority. A finding of non-conformity irreversibly blocks the batch's access to the internal market.

The penalty regime (Article 25) requires Member States to apply proportionate and dissuasive penalties that effectively deprive operators of the economic benefits derived from the infringement. The pecuniary penalties reach severe maximum limits: not less than 4% of the operator's or group's annual Union-wide turnover in the preceding financial year. With respect to corporate groups, the calculation may rely on the consolidated turnover of the ultimate parent company.

The punitive measures go beyond the purely economic, encompassing the confiscation of the relevant products and of the revenues obtained from the infringing transactions. In addition, infringing operators face temporary exclusion (up to 12 months) from public procurement procedures and from access to public funding. To ensure reputational deterrence, the Commission will publish the final judgments imposed on legal persons in a register of infringers (naming and shaming), amplifying the financial damage with tacit exclusion from the European B2B market.

Analytical reflection — the 2026 window for operational preparation + intersection with CSDDD and FLR

The formal postponement to 30 December 2026 for the full application of the EUDR obligations to large operators (and to June 2027 for SMEs) should not be interpreted as a structural moratorium, but as a shift of the critical temporal vertex. This window must be exploited by European fashion brands to reconfigure their data architectures. Lifting the opacity at Tier 3 and Tier 4 (slaughterhouses and cattle farms for leather, and preventively the cultivation fields for cotton) ceases to be a voluntary sustainability ambition and becomes a technical mandate of business continuity.

This imperative is inextricably intertwined with two parallel corporate regulatory pillars: the CSDDD Directive 2024/1760 (Corporate Sustainability Due Diligence) and the Forced Labour Regulation FLR 2024/3015 (Forced Labor Regulation). The EUDR acts as a product-based specific rule. Article 1, paragraph 3, of the CSDDD provides that, in the event of conflict with provisions of another Union legislative act pursuing the same objectives and laying down more extensive obligations, the specific rule prevails to the extent of the conflict. While the EUDR scans the exact geolocation of the deforestation of a leather consignment, the CSDDD requires obligated corporations to identify and mitigate adverse impacts on human rights and the environment throughout their chain of activities, in a horizontal format.

The asymmetry in the burden of obligation generates a pernicious cascade effect (upstream cascade). Brands directly obligated by the CSDDD or by their status as leather-importing operator under the EUDR offload the pressure of traceability and geospatial data collection onto suppliers not directly obligated by regulatory thresholds. The Tier 2 or Tier 3 supplier suffers the requirement as an inescapable contractual pain-point with its large European customer, who shields its legal risk by externalising the evidentiary requirement.

For its part, the FLR Regulation 2024/3015 establishes an absolute prohibition on the Union market of products made with forced labour at any stage of extraction, harvesting, production or manufacturing. FLR investigations, based on risk approaches, may converge spatially with the EUDR. A batch of bovine leather or cotton (when annexed) will not only require deforestation-free coordinates to validate the Due Diligence Statement under the EUDR, but the same farms and manufacturing centres will be subject to FLR scrutiny for the detection of indicators of labour coercion or systemic forced labour.

To go deeper into the operational compliance methodology, the technical manual on textile Due Diligence under the CSDDD structures the horizontal framework for identifying and mitigating adverse impacts. The dogmatic interaction between the two regulatory vectors is analysed in the jurisdictional overlap of CSDDD + FLR for unified textile DD. The dates, scope and specific guidelines of the sectoral textile FLR are detailed in the analysis of Regulation (EU) 2024/3015 on forced labour. The integration of traceability and risk assessment systems across multiple tiers is the only viable response to the dogmatic overlap of these rules, structurally redefining the European textile supply matrix.