As companies strive to uphold the rights of human workers in their global supply chains, they shouldn’t overlook another critical concern of regulators: trees.

On the horizon is the European Union’s Regulation on Deforestation-free Products (EUDR), described by the EU as an effort to cut greenhouse gas emissions and preserve biodiversity by slowing the destruction and degradation of the world’s forests.

EU regulators are targeting the stripping of forests for agricultural production of such commodities as wood, cocoa, soy, palm oil, coffee, rubber and cattle. According to the United Nations’ Food and Agriculture Organization (FAO), an estimated 10 million hectares of forest are cut down each year. “The EU is partly responsible for this problem and wants to lead the way to solving it,” the European Commission says.

Enforcement of the EUDR is currently scheduled to kick in on December 30, 2025, with a longer period of adaptation for “micro and small” enterprises. As of that date, products entering the EU must be verified as not contributing to deforestation or environmental degradation. To be in compliance, companies must provide full traceability of affected goods, in many cases all the way back to the plot of land on which they were produced. Verification takes the form of a “due diligence” statement that’s submitted to the EU.

That sounds like a tall order for complex, multi-tier agricultural supply chains, but the EU downplays the difficulties of compliance. For one thing, the European Commission says, the law allows for “aggregated traceability,” meaning that companies can report on all relevant sourcing areas, “even if they cannot assign areas to specific products.”

In addition, the required information can be submitted online to the EU’s digital database, avoiding the need for “mountains of paperwork,” and repeated filing of the same information. (Products are identified by their Harmonized System codes.) The Commission’s Information System, which it has promised to make officially available prior to the EUDR coming into force, “is designed to significantly reduce administrative burdens and increase efficiency.”

That’s not to say that compliance will be a snap. “For businesses, navigating the complexities of EUDR is daunting,” said Shameek Gosh, chief executive officer and co-founder of TrusTrace, which offers a software platform for supply chain traceability and compliance. “They are under immense pressure to produce granular traceability data, which makes compliance practices challenging since they need to integrate new processes into existing frameworks.”

In terms of reporting specificity, nothing has been previously attempted at this scale, says Marianne Uddman, TrusTrace’s senior vice president of go-to-market. “We’re anticipating that it will be challenging just to get the data from a technical perspective,” she says. In recent years, global businesses have encountered similar difficulties while attempting to identify violations of workers’ rights within multiple tiers of suppliers, as well as the presence of conflict minerals, and cotton harvested with child labor.

Many farm owners lack the geocoordinates that define the precise location and borders of their land, Uddman says. That’s essential to taking satellite images and running analyses of each area for purposes of accurate reporting.

Some larger corporations have already begun working with farmers to amass the necessary data. But, as Uddman notes, it’s something of a moving target, especially when it comes to cattle, which are frequently transported between farms and sold multiple times until slaughter. “It’s very opaque, and difficult to get data.”

Part of the solution lies in existing geospatial image-analysis technology, which has previously been used to detect problems in railways and other aspects of supply chain infrastructure. But the need to employ it in small areas within specific time frames adds a layer of complication, Uddman says.

Efforts to protect the world’s forests are well-established. The long list of organizations fighting to stop deforestation over the years includes the Rainforest Alliance, Greenpeace, World Wildlife Fund and especially the Forest Stewardship Council. FSC, for one, maintains a certification system involving a “check tree” label attesting that the product in question doesn’t come from deforested land. The label is recognized by 46% of global consumers, FSC says. Uddman says TrusTrace uses the council’s certification as a “proof point” in its own traceability platform. (The company also relies on the satellite image-analysis technology of OpenAtlas, to create due diligence statements on behalf of its customers.)

Penalties for non-compliance with EUDR could range up to 4% of a company’s annual turnover. Still to be determined is what percentage of import shipments will actually be checked by EU customs officials. The process will likely be random, although importers have petitioned the EU to add a “no-risk” category to the current “low,” “medium” and “high” designations. Also uncertain is what companies will do if they’re unable to obtain geospatial data. China has refused to share that information for its woodlands, citing security concerns.

None of these questions absolves global businesses of the need to begin preparing for the coming of the EUDR at the end of 2025. “We urge our customers to start mapping their supply chains,” Uddman says. “The biggest challenge will be actually getting the data.”