The European Union Deforestation Regulation (EUDR) is forcing companies to confront a difficult reality: most organizations still do not fully understand their own supply chains.
For years, many businesses operated successfully with visibility into direct suppliers and limited insight beyond that. EUDR changes the equation entirely. The regulation requires companies to prove products are deforestation-free, legally produced, and traceable to the exact plot of land where production occurred. That sounds straightforward in theory. Operationally, it is proving far more difficult for many global organizations.
As supply chain leaders work through implementation planning, the conversation is shifting away from reporting deadlines and toward a much larger issue: how to build traceability across fragmented global supplier ecosystems that were never designed for this level of scrutiny. Here are the questions supply chain professionals are asking most right now.
Is EUDR really going to disrupt supply chains this much?
For many industries, yes.
What many organizations underestimated is how deeply EUDR reaches into day-to-day operations. This is not simply a compliance exercise sitting inside legal or sustainability teams. It can directly affect sourcing, procurement, supplier onboarding, logistics, and inventory continuity.
Even after the European Commission introduced simplification measures aimed at reducing administrative burden, companies are still responsible for proving products meet strict traceability and sourcing requirements.
The reporting process may become simpler for some organizations. The operational challenge of validating upstream sourcing data remains significant.
For many companies, EUDR is exposing supplier visibility gaps they did not previously recognize.
Why is EUDR proving so difficult operationally?
Because most supply chains were not originally built for origin-level traceability.
Many organizations know their direct suppliers reasonably well. Visibility often becomes weaker beyond tier-1 relationships, especially in industries that depend on smallholder farming networks, cooperatives, processors, aggregators, and regional intermediaries.
That challenge is particularly visible across coffee, cocoa, palm oil, soy, timber, rubber, and cattle and beef supply chains.
According to Resilinc’s recent report, EUDR Compliance and Risk Management Across Global Supply Chains:
- Approximately 60% of global coffee supply comes from smallholder farmers
- West Africa accounts for more than 70% of global cocoa production
- Natural rubber supply chains rely heavily on fragmented smallholder production systems
Many companies are now being asked to validate sourcing data they have never historically collected or monitored continuously. That is creating substantial operational pressure across procurement and compliance teams.
Are regulatory disruptions becoming a larger supply chain problem overall?
Current data suggests they are. Resilinc EventWatchAI data shows regulatory change disruptions increased 89% year-over-year across both food and beverage and retail supply chains. This matters because regulatory pressure is no longer confined to audits or reporting requirements. It is increasingly creating operational disruption across sourcing and supplier management activities.
Companies are reporting challenges related to:
- Supplier onboarding delays
- Escalating due diligence requests
- Documentation bottlenecks
- Customs scrutiny
- Sourcing interruptions
At the same time, geopolitical disruptions also increased significantly across these industries, adding additional sourcing volatility and trade uncertainty.
While the exact operational impact will vary by company and industry, regulatory compliance is increasingly intersecting with operational resilience planning.
Are companies realizing they have more indirect exposure than expected?
In many cases, yes.
One of the biggest surprises for organizations is how much compliance exposure may exist outside direct commodity sourcing.
The report notes that EUDR exposure may extend into packaging materials, feed systems, processed ingredients, and embedded commodity derivatives.
As a result, some companies may discover that indirect suppliers deeper in the network cannot fully validate sourcing origins for paper products, agricultural inputs, or palm-derived ingredients.
This does not automatically create noncompliance. However, it can create additional due diligence complexity and operational risk.
How is AI becoming more important in EUDR compliance?
EUDR requires organizations to process large volumes of supplier information, sourcing records, geographic data, and regulatory updates simultaneously. Many companies are finding that manual workflows alone are difficult to scale efficiently.
AI-assisted systems are increasingly being used to help:
- Identify supplier relationships across multiple tiers
- Detect potential sourcing risks earlier
- Surface documentation gaps
- Monitor regulatory changes globally
- Prioritize higher-risk suppliers
- Accelerate supplier outreach
As Adam Bartlett, Director of Expert Services at Resilinc, explains:
“EUDR is forcing companies to look much deeper into their supply chains than they have historically been able to.”
AI does not eliminate compliance complexity. However, many organizations are using it to improve scalability, visibility, and response times.
Is EUDR part of a larger global compliance trend?
Yes, EUDR is part of a broader movement toward increased supply chain transparency and evidence-based compliance requirements.
Companies are simultaneously navigating:
- Forced labor regulations
- ESG reporting requirements
- Scope 3 emissions expectations
- Carbon border adjustment mechanisms
- Supplier due diligence mandates
- Trade restrictions
- Geopolitical sourcing risks
Across many of these regulations, the same challenge continues to emerge: limited visibility beyond direct suppliers.
Organizations without strong multi-tier supply chain intelligence may face greater operational difficulty responding to expanding regulatory expectations.
What should supply chain leaders focus on now?
Many organizations are still early in this transition, but several priorities are becoming increasingly clear. Companies should first understand where supplier visibility currently stops within their networks. For many organizations, that boundary still exists at tier-1 suppliers. Organizations may also benefit from prioritizing the commodities and sourcing regions carrying the highest potential exposure first, rather than attempting to address all supplier relationships simultaneously.
Another major area of focus is continuous monitoring capability. Compliance requirements are becoming more dynamic, and many companies are moving away from annual review cycles toward more continuous visibility models.
Finally, operational alignment is becoming increasingly important. Procurement, sourcing, logistics, compliance, and supplier risk teams are often being asked to work together much more closely than they historically have.
The bottom line
EUDR is exposing how limited traditional supply chain visibility has become for many global organizations. As global compliance expectations continue evolving, those capabilities may increasingly influence operational resilience, supplier agility, and long-term competitiveness.
Download the full EUDR special report to explore the latest disruption data, emerging compliance risks, and the operational strategies companies are using to strengthen supply chain resilience.
