In 2025, the European Union is rolling out one of its most impactful sustainability regulations, the EU Deforestation Regulation (EUDR). While designed to curb global deforestation, its implications will touch nearly every business that deals in commodities like leather, cotton, rubber, and wood-based materials. For European fashion Small-Medium Enterprises (SMEs), this regulation introduces new expectations that are too important to ignore.
This guide breaks down what the EUDR means for small and medium-sized fashion enterprises in Europe, and how early action can ensure compliance and unlock commercial opportunities.
What Is the EUDR?
The EUDR aims to stop the import and sale of products in the EU that are linked to deforestation or forest degradation. It applies to both raw commodities and finished products that use them. In fashion, this includes leather shoes, handbags, viscose-based clothing, and rubber accessories.
To comply, companies must demonstrate that these materials:
- Are deforestation-free (produced on land not subject to deforestation after Dec 31, 2020)
- Were legally produced
- Are traceable to the plot of land they originated from
Why SMEs Need to Prepare
Even though enforcement is staggered based on company size, SMEs cannot afford to wait. That’s because:
- Large buyers will require their entire supply base—regardless of size—to align with EUDR
- Non-compliance can result in lost contracts, product de-listings, and reputational risk
- Distributors and online platforms may refuse to carry non-traceable goods
If you sell to a brand, retailer, or export into the EU market, you will be asked to prove your sourcing practices are EUDR-compliant.
What You’ll Be Asked to Provide
EUDR compliance requires a due diligence statement, containing:
- The geolocation (GPS coordinates) of land used to produce raw materials
- Evidence that production was legal and deforestation-free
- A supply chain map showing each step from farm to finished good
While SMEs may not need to file these statements directly, your upstream or downstream partners likely will—and they will rely on you for timely, accurate data.
Common Challenges for SMEs
SMEs often face barriers like:
- Limited access to upstream supplier data
- Lack of digital systems to manage traceability
- Over-reliance on brokers or middlemen with poor documentation
The good news is that traceability platforms are becoming more accessible, enabling even small brands to track sourcing and generate reports with minimal manual work.
Practical Steps to Get Ready
To prepare for EUDR requirements:
- Ask your material suppliers for declarations of origin and deforestation-free status
- Begin collecting GPS or region-level location data for leather, cotton, and wood-based materials
- Use digital traceability software to organize and store documentation
- Align with certification bodies or verified suppliers wherever possible
You don’t need to be perfect, but you do need to start creating a paper trail that shows you are taking action.
Final Thoughts
The EUDR is a powerful catalyst for transparency in the European fashion ecosystem. For SMEs, it may feel daunting at first, but it’s also a chance to lead. By embracing traceability now, you’ll not only stay compliant, but you’ll build a smarter, more trusted brand for the future.
