The EU Deforestation Regulation (EUDR) has created significant questions for fashion and textile companies trying to understand which commodities, materials and products fall under compliance, what their obligations are, and the timeline for compliance. Following the additional one-year delay and further simplifications that were agreed by the European institutions at the very end of 2025, the new December 30, 2026 deadline for large enterprises provides brands with a clear timeline to operationalise the rules and address remaining implementation challenges.
This blog is part of a series developed in collaboration with TrusTrace, addressing the most common questions raised by companies on the EUDR. The first article in the series focused on EUDR questions raised by businesses in the agri-food sector, while this edition turns to the specific challenges faced by fashion and textile companies. If you prefer a webinar format, you can watch this webinar co-hosted by our teams that answered the most common concerns from enterprise brands. Find the link to Part 2 at the end of this article.
Changes Introduced By The Latest Simplification
Adopted at the end of December, 2025, let’s recap what other changes have been introduced to the final text by the European Council and the Parliament in the final stages of negotiations, aside from the one-year delay for large enterprises:
- The obligations of operators and traders have been further simplified. Operators and traders do not need to submit due diligence statements, nor to pass on the reference numbers further in the supply chain. Only the operator will need to produce a due diligence statement. The first downstream operator needs to collect a due diligence reference number, but does not need to submit DDS any more.
- Micro and small primary operators from low-risk countries that are placing goods on the market of those low-risk countries do not need to submit a due diligence statement (DDS). They can submit a one-off simplified declaration. The geolocation of plots of lands can be replaced by the address of the establishment, but only for these micro and small primary operators.
- Adding to the evolving landscape, the Commission will publish a simplification report by April 2026 to assess the burden on smaller operators and potentially suggest further simplifications. This could even come with a new legislative proposal, signaling that the rulebook may not be set in stone just yet.
- And in a move that caught many by surprise, books, newspapers and printed materials will now be excluded from the regulation. This exemption sets a precedent ahead of the review clause and may open the door for other sectors to push for similar treatment. Expect some industries to make that case.
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Q: What materials are in scope for fashion and textile companies?
A: Unlike food and beverage,EUDR exposure in the fashion sector is more targeted but still significant. Three core materials bring fashion brands into scope:
- Hides and leather: Raw hides, tanned hides and finished leather
- Rubber: Natural rubber used in footwear soles, accessories, and components
Important to note that specific wooden products (such as wooden buttons and other wooden accessories) and wood pulp are in scope of EUDR, however wood-based fibers such asiscose, modal, lyocell, and others are not in scope. Neither the garments made with those fibers.
As Pauline God, Policy and Partnership Manager at TrusTrace observed during the webinar, “The EUDR goes far beyond apparel. It covers key commodities like coffee, cocoa, soy, palm oil, rubber. So it’s much broader than textiles.”
Q: Are ready-made garments and shoes directly impacted?
A: The finished products, such as garments and shoes, are not listed in the EUDR’s Annex 1. However, this doesn’t mean fashion brands are fully exempt.
The critical factor is what exactly you are placing or making available on the market. If to manufacture your shoes or garments, you’re directly importing wood pulp, hides, leather, or rubber to the EU, the regulation applies to those materials. Your responsibility to track and trace these materials remains completely relevant, even if the final shoe or garment isn’t itself in Annex 1.
Practical example: A shoe manufacturer is importing leather uppers or natural rubber soles into the EU, those materials are in scope and require full compliance.
Natalia clarifies the principle: “It’s really important to look at what is placed on the market or made available on the market at this particular stage.” If your leather component is in Annex 1 and you’re placing it on the EU market, you have obligations, regardless of the final product.
Q: What about leather specifically—what do we need to know?
A: Leather is covered under the EUDR. The following categories from Annex 1 are directly in scope:
- ex 4101 Raw hides and skins of cattle (fresh, or salted, dried, limed, pickled or otherwise preserved, but not tanned, parchment-dressed or further prepared), whether or not dehaired or split
- ex 4104 Tanned or crust hides and skins of cattle, without hair on, whether or not split, but not further prepared
- ex 4107 Leather of cattle, further prepared after tanning or crusting, including parchment- dressed leather, without hair on, whether or not split, other than leather of heading 4114.
If you are importing these products to the EU, as an operator you must demonstrate that the cattle, from which the leather derives, were not raised on land linked to deforestation after the December 31, 2020 cut-off date and provide full due diligence information on origin and deforestation-free.
In practice, this creates two layers of complexity:
- Grazing land: You must trace to the plots where cattle were raised
- Feed sources: The deforestation risk linked to feed (particularly soy) must be addressed upstream
This means any leather placed on the EU market must be proven deforestation-free through comprehensive due diligence covering both the cattle’s grazing land and feed sources.
Natalia provides further guidance on roles:
“If the company is procuring leather or leather hides and making bags out of it, the bag maker doesn’t have direct due diligence obligations under the EUDR, but they could have obligations if they’re importing the leather to the EU. In any case, it is advisable to have traceability for the leather that you are using for your leather bags. It is necessary to ensure that proper due diligence on deforestation has been conducted by your suppliers.”
In short:
- If you’re importing leather into the EU: You’re an operator with full due diligence obligations.
- If you’re manufacturing with already-imported leather that has a DDS: You’re a downstream operator with much lighter obligations – no due diligence statement obligations and no obligation to ascertain that due diligence has been done by the other actors.
- If you’re only making the final product (bags, shoes) from compliant leather: No direct EUDR obligations, but you should still verify your supplier’s compliance.
Q: Our supply chains are mass balance—can we continue this way?
A: This is particularly challenging for materials like cotton (though not currently EUDR-covered) and increasingly for leather supply chains. Natalia is direct about the requirement:
“Mass balance doesn’t respond to the requirements of the regulation. So of course you can have a transition period and start working with your suppliers to improve traceability. But these volumes cannot go to the European market when the EUDR enters into application.”
The regulation requires segregated supply chains with full traceability to the plot of land. While this represents a significant shift, Natalia sees it as achievable: “It’s feasible, for some sectors more easily achievable than for others because of the different ways the supply chains are operating.”
Her recommended approach: “Prioritise high risk volumes and look at the country benchmarking list. Rather than looking at the low risk, look at the standard risk, high risk… prioritise those countries and the biggest volumes that you’re sourcing.”
The one-year delay provides time to make this transition systematically rather than rushing all supply chains simultaneously.
Q: Am I an operator or a downstream operator—and why does it matter?
A: Understanding your role is crucial because it impacts your obligations. The revised regulation introduces the “downstream operator” category with significantly lighter requirements.
You’re an OPERATOR if: You’re the first entity placing EUDR-relevant materials on the EU market. Example: A tannery importing raw leather hides into the EU from Brazil.
Your obligations:
- Conduct comprehensive due diligence
- Collect plot-level geolocation data (for cattle grazing land and feed sources)
- Submit due diligence statements (DDS)
- Ensure negligible deforestation risk and legal compliance
- Register in EU information system
You’re a DOWNSTREAM OPERATOR if: You’re working with materials that already have existing due diligence statements. Example: A shoe manufacturer in Italy using leather that was already imported by a tannery with an existing DDS.
Your obligations under EUDR:
- Must keep records and pass DDS reference numbers through supply chain
- Must register in information system
- Must inform authorities if you discover non-compliance
- Do NOT need to conduct new due diligence
- Do NOT need to submit new due diligence statements
The obligation to collect and keep reference numbers applies only to the first downstream operator or trader and should not apply to other downstream operators or traders further down in the supply chain.
Natalia explains: “The downstream operator is usually the second actor who works with commodities or products that have already been placed on the market and due diligence statements for which have already been filled in. That’s why the role of the downstream operator and the duties are much lighter than the operator.”
Q: If we buy from an SME that’s exempt until mid-2027, what are our obligations?
A: This is an important scenario many brands are facing. If a large enterprise purchases a product subject to EUDR from a small company that has already imported it to the EU market, but the SME is exempt from EUDR obligations until June 2027, what happens?
The large enterprise does NOT become exempt. But it also does not automatically have to redo full due diligence because the SME is temporarily exempt. The regulation has created an uncomfortable middle ground.
Key principle: The large enterprise is not required to retroactively perform full operator-level due diligence, as long as it has no reason to believe the product is non-compliant. However the large enterprise is still subject to the general prohibition to place or make available on the EU market products that are deforestation-free and not illegal.
It would make sense for large companies to perform basic plausibility checks, assess country and commodity risk, document why reliance on the SME is reasonable, and be ready to explain their sourcing logic.
This also creates a strategic consideration: large enterprises may want to work with their SME suppliers now to establish compliance processes, rather than waiting until 2027 when the SME obligations begin.
Q: Do we need batch-level tracking even when components may end up out of scope?
A: This question came from a large manufacturer with complex supply chains where products or components can shift in or out of scope depending on where they are used further in the supply chain.
The guidance is to track at the level of commodity or product that enters the EU market, regardless of the final product’s classification. If your leather component is in Annex 1 and you’re placing it on the EU market, you need traceability, even if the final shoe or bag isn’t directly regulated.
However, there’s helpful flexibility: “You can cover the shipments of 12 months in one DDS, which is very interesting,” Natalia explains. “Which still is a lot of work because you need to ensure traceability and provide all the plots of land from which the commodities are coming.”
The caveat: “Be very careful not to exceed the volumes that you are declaring in the DDS.” This annual DDS approach reduces administrative burden while maintaining traceability requirements.
Q: What about intra-EU warehouse transfers—do they need new DDS?
A: Several brands have asked whether moving materials between warehouses within the EU requires new due diligence reference numbers.
While Natalia notes this requires deeper case-by-case exploration, the general principle is that when internal warehouse movements within the EU are happening after the operator has submitted the DDS, these wouldn’t trigger DDS requirements.
The key is understanding what constitutes “placing on the market” versus internal logistics operations. If you’re simply moving already-compliant materials between your own facilities within the EU, this likely doesn’t trigger new obligations.
Head over TrusTrace’s website and don’t miss Part 2 of Common Questions Fashion & Textiles Brands are Asking About EUDR for answer to questions about tracing complex processes, SMEs, and data requirements.
Getting Expert Support
These questions represent the complexity fashion brands face with EUDR compliance. As Pauline observed, “It’s tested our patience for sure, but it’s also driven quite a lot of innovation and collaboration, which we haven’t really seen before.”
The key is to continue with a phased, strategic approach. For deeper guidance on implementation strategies specific to fashion and textiles, watch the full EUDR webinar hosted by TrusTrace and Ohana.
TrusTrace has partnered with leading fashion brands and organisations like the Forest Stewardship Council (FSC) to create validated solutions for systematic EUDR compliance, from supply chain mapping through DDS generation and EU system integration.
At Ohana, we offer support to companies in EU policy monitoring, influencing and preparation for implementation of the EU laws in this dynamic environment (don’t forget the EUDR review by April 2026). Don’t hesitate to get in touch and we’d be happy to help you unpack what is happening in Brussels and how this might affect your organisation.