Research explores how businesses respond to the EU Deforestation Regulation
Tropical and subtropical forests face severe threat of loss and degradation from commodities linked to agricultural expansion and forestry. This not only drives negative impacts like greenhouse gas emissions and biodiversity loss but also impacts local communities. Global consumers are connected to this distant forest loss through complex value chains where commodities are harvested, processed, transported and sold.
To bridge this gap, the EU adopted the EU Regulation on Deforestation-free Products (EUDR) in 2023 with implementation set for 30 December 2026. The regulation aims to guarantee that the products EU citizens consume do not contribute to global forest loss. It covers seven commodities: cattle, cocoa, coffee, oil palm, rubber, soya and wood, and products that contain, have been fed with or have been made using these.

Under the EUDR, any business placing these commodities on the EU market, or exporting from it, must prove that they do not originate from recently deforested land. While the EUDR directly applies to EU businesses, it essentially regulates businesses globally who want to sell to the EU market. These must, for example, provide geolocations of the plots where products were grown/harvested and evidence of legality.
Understanding why and how businesses across the globe respond to environmental regulations like the EUDR is a key question for their successful uptake.
A new study with CBA co-author Yitagesu Tekle Tegegne explores this in Brazil, the Congo Basin, and the EU, covering both forestry and agricultural sectors. Based on 200 interviews across the value chains, a clear pattern emerges: market considerations drive everything.
While regulative pressure matters – particularly for EU-based businesses – ethical or legal concerns are almost always filtered through a financial lens before they influence decisions.
If it is too costly or complicated, smaller suppliers are likely to abandon the EU market and just sell elsewhere instead. Some larger businesses plan to separate EUDR-conforming from non-conforming supply rather than changing their practices, which means deforestation-linked goods simply flow to other markets with no net environmental benefit.
The study highlights that for regulation to drive real change rather than just “paper compliance”, policymakers must move beyond a one-size-fits-all approach. Different businesses – from massive multinationals to small local farmers – experience these rules in vastly different ways. Ultimately, the authors argue that if a regulation is going to drive real change, market forces should be complemented with strong deterrence, coordination with other regions and markets to prevent leakages, supportive incentives and a sense among businesses that the rules are fair and legitimate.
Cramm, M., Ziegert, R. F., Berning, L., Uwiringiyimana, H., Schulz, D., Shidiki, A., Zanguim, H., Wunder, S., Börner, J., Azevedo‐Ramos, C., Tegegne, Y. T., & Sotirov, M. (2026). Chain reactions: how businesses plan to respond to the EU Deforestation Regulation in Brazil, the Congo Basin, and Europe. Regulation & Governance, 1–15. https://doi.org/10.1111/rego.70156
Image: Adobe Stock / whitcomberd



