Turning the EUDR Delay into a Competitive Advantage

Turning the EUDR Delay into a Competitive Advantage

Executive Summary

The EUDR delay is not a setback; it is a strategic window to develop a more robust, transparent, and future-ready supply chain. Using a backward planning approach from the 2027 target, companies can strengthen four core pillars:

1.  Supplier Readiness & Traceability
   Mapping to the smallholder polygon/plot level reveals on-the-ground realities and becomes the longest but most crucial workstream for compliance.
2. Verified Legal Evidence
   Compliance must follow each country’s laws. Indonesia and Malaysia require customised approaches to address land overlaps, licensing gaps, and customary rights.
3. Deforestation-Free Evidence
   A 10-year satellite-based historical archive provides tamper-proof proof of commodity origins.
4. Risk Analysis & Mitigation
   Using Article 10 parameters, companies shift from static risk checklists to active, annual risk management.

EUDR → Corporate Sustainability Due Diligence Directive (CSDDD) Integration
EUDR is only half the journey.A strong EUDR foundation enables seamless CSDDD compliance (human rights, ethical supply chains, landscape risk).

Business Risk of Inaction
Delays in preparation increase the risk of shipment rejections, market access loss, and damage to brand image.

Introduction: A Moment for Strategic Pause

Interpreting the EUDR delay as a reason to slow down is a mistake.
This moment represents a strategic breathing space, allowing companies to move from reactive compliance pressure to deliberate, structured, and future-focused preparation.
The objective should go beyond merely meeting deadlines.
Let’s aim to build a strong and transparent supply chain system that protects companies, uplifts suppliers, and integrates smallholders into global markets.
By applying backward planning from the 2027 enforcement date, we ensure that every step taken today directly gives a sense of control and reassurance for long-term compliance readiness.

Pillar 1: Total Supplier Readiness & Traceability

Challenge

Critical data gaps and fragmented upstream supply chains, especially among smallholders, require companies to conduct detailed assessments to identify specific weaknesses and tailor their proactive strategies accordingly, thereby enhancing targeted preparation.

Strategic Response

Traceability must reflect reality, which involves implementing spatial mapping down to the polygon/plot level and verifying field conditions. Understanding the resource requirements and potential challenges of these systems helps companies prepare for practical execution by addressing feasibility concerns.

Key Components

• Agriplot spatial verification
• Alignment of declared vs actual boundaries
• Supplier onboarding and capacity building

Mini-Case Example

In one district, 28% of smallholder plots reported by a supplier overlapped with forest-designated areas.

This triggered amlegal status verification and engagement with Satgas PKH to resolve overlap risks before shipment.

Discoveries Made

• Real plantation boundaries
• Local permit inconsistencies
• Smallholder decision-making logic
• Land use overlaps (forest areas, customary lands)

Timeline

Extends until Q4 2026.

High cost, but foundational for long-term compliance, and significantly cheaper than the cost of shipment rejection.

Business Risk if Ignored

• Risk of inaccurate plot declarations
• High exposure during Competent Authority audits
• Potential for entire shipment blocks

Pillar 2: Verified Legal Evidence

Challenge

Legal requirements differ widely across countries and are often affected by overlapping land tenure systems.

Strategic Response

Compliance must adhere with EUDR Article 2(40), which requires compliance with the producer country’s laws.

Approach by Country:

Indonesia

• Verification of HGU, SHM, AMDAL
• Resolving forest overlaps through Perpres 5/2025 → Satgas PKH

Malaysia

• MPOB licensing verification
• EIAs for Peninsular Malaysia
• Navigating NCR (Native Customary Rights) complexities in Sarawak and land frameworks in Sabah

Mini-Case Example

During verification in East Kalimantan, two suppliers held plantation blocks within forest areas due to outdated spatial planning.

Through Satgas PKH, release letters were secured to ensure legal compliance prior to shipment.

Timeline:

Sequential, country-specific strategies from Q1–Q4.

Business Risk if Ignored

• Legality gaps flagged by Competent Authorities
• Supplier disqualification
• High reputational impact

Pillar 3: Deforestation-Free Evidence

Challenge:

Demonstrating that commodities are not linked to post-cutoff deforestation.

Strategic Response:

A 10-year satellite-based historical archive is built to provide tamper-proof evidence.

Key Components:

• Pre-cut-off imagery
• At the cut-off verification
• Shipment year confirmation
• Standardised digital repository

Timeline:

• Q1: Data collection
• Q2: Third-party validation
• Q3–Q4: Repository finalization

Pillar 4: Risk Analysis & Mitigation

Challenge:

Risk is dynamic and ever-changing, aligned with EUDR Article 10 parameters on geographic and environmental context.

Key Components:

• District-to-country risk scoring
• Categorisation into low, standard, and high risk
• Mitigation plans for high-risk areas
• Continuous monitoring and evaluation

Timeline

Risk management is not a one-off exercise. Annual cycles are required:

• Q1: Mapping
• Q2: Mitigation Plan Drafting
• Q3: Implementation
• Q4: Evaluation & Reporting to Competent Authorities

This ensures companies can demonstrate credible, long-term due diligence.

Business Risk if Ignored

• High-risk classification by the EU
• Enhanced due diligence
• Potential delays in product clearance

Future Vision: Integrating EUDR with CSDDD

EUDR and CSDDD are interconnected frameworks:

EUDR covers:

• Land legality
• Commodity origin
• Deforestation compliance

CSDDD expands into:

• Human rights
• Ethical labor practices
• Environmental and social due diligence
• Landscape-level risk mitigation

A company fully compliant with EUDR is only halfway towards CSDDD alignment.

By treating EUDR as the foundational layer, companies can ensure a smooth transition into the broader, people-centered requirements of CSDDD by 2027.

Conclusion: From Delay to Advantage

Companies that treat the EUDR delay as a strategic opportunity, not a pause, will enter 2027 with a decisive advantage, being:

• Traceable supply chains,
• Solid legal evidence,
• Verifiable no-deforestation proof, and
• A robust risk mitigation system.

Those who delay preparation will face:

• documentation bottlenecks,
• elevated compliance risks,
• and potential shipment rejection.

The deadline shifted. The responsibility did not.

This is the moment to lead while others wait.