UK Environment Act vs. EU Deforestation Regulation: Navigating Forest Risk Compliance

As sustainability regulations evolve, businesses operating in the UK and EU face overlapping yet distinct requirements to ensure deforestation-free supply chains. The UK Environment Act 2021, specifically its Forest Risk Commodities (FRC) provisions, and the EU Deforestation Regulation (EUDR) share a common goal of addressing deforestation but differ in scope, implementation, and compliance mechanisms.

Both regulations represent significant advancements of earlier frameworks - specifically the UK Timber Regulation (UKTR) and the European Union Timber Regulation (EUTR).

While UKTR and EUTR focused narrowly on ensuring timber legality, these newer regulations broaden the scope to include multiple high-risk commodities linked to deforestation. They also move beyond legality to address global concerns about sustainability, with the EUDR introducing a no-deforestation standard and both frameworks requiring more robust traceability. These shifts reflect the growing urgency to tackle climate change and biodiversity loss through stricter and more comprehensive supply chain governance.

In this blog, we’ll compare the FRC provisions against the EUDR and explore how traceability solutions, like Interu, can streamline compliance for organisations operating across both regions.

Overview of the UK Environment Act’s Forest Risk Commodities Provisions

The UK Environment Act introduced the Forest Risk Commodities (FRC) provisions to address deforestation linked to the production of commodities such as timber, soy, palm oil, and cocoa. The provisions:

Prohibit UK businesses from using FRCs produced on land where deforestation was illegal under local laws.
Require companies to conduct due diligence on their supply chains to ensure compliance.
Mandate annual reporting to demonstrate traceability and transparency.

These requirements apply to businesses meeting a specific turnover threshold which is a global annual turnover threshold at £50m, and businesses that are using 500 tonnes or less of each commodity per annum can apply for an exemption from the obligations*.

Overview of the EU Deforestation Regulation (EUDR)

The EUDR, adopted in 2023, represents a broader and more ambitious framework. Unlike the UK’s approach, the EUDR requires products to be not only legally sourced but also deforestation-free. This means:

Commodities must not be produced on land deforested after 31 December 2020, regardless of local laws.
Businesses must provide geo-location data for supply chain verification.
The regulation covers a wider range of commodities, including wood-based products, soy, beef, palm oil, cocoa, coffee, rubber, and their derived products.
Enforcement includes penalties for non-compliance and market access restrictions for non-conforming products.

Key Differences Between the UK Environment Act and EUDR Implications for Businesses

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Aspect	UK Environment Act (FRC Provisions)	EU Deforestation Regulation (EUDR)
Scope of Commodities	Specific high-risk commodities such as wood-based products, soy, palm oil, cocoa, and cattle (excluding dairy).	Broader range, including wood-based products, soy, palm oil, cocoa, coffee, beef, rubber, and derived products like furniture and chocolate.
Deforestation Standard	Legality-based: Commodities must not be linked to illegal deforestation under local laws.	No-deforestation standard: Products must not be linked to deforestation or forest degradation after 31 December 2020, regardless of local laws.
Company Size Threshold	£50m global annual turnover. Businesses that are using 500 tonnes or less of each commodity per annum can apply for an exemption from the obligation.	Applies to companies of all sizes if they import or trade regulated commodities within the EU market, with varying obligations for SMEs.
Trade Volumes Threshold	Thresholds for the minimum volume of commodities subject to due diligence are yet to be defined but are expected to exclude very low-volume traders.	No volume threshold; all traders must comply, though smaller operators may have simplified obligations.
Data Requirements	Companies must conduct due diligence, ensuring compliance with local laws, and submit annual reports.	Companies must collect and verify geo-location data for the land where commodities are sourced, ensuring deforestation-free status.
Traceability Level	Focuses on legality, requiring traceability to the country or region of origin.	Requires granular traceability to the plot level, with coordinates for each source location.
Implementation Timeline	Awaiting secondary legislation to define enforcement timelines. Expected phased rollout.	The enforcement of the regulation has been delayed by one year (December 2025), however there’s still a three-way agreement process ahead to finalise the new timeline.
Jurisdiction	Applies to UK-based businesses and imports into the UK. Does not cover products exported from the UK to other markets.	Applies to all businesses importing, trading, or exporting regulated commodities within the EU.
Reporting Frequency	Annual reporting required, with penalties for non-compliance.	Continuous compliance with geo-location verification; reporting tied to each trade.
Penalties for Non-Compliance	Unlimited fine.	Penalties include significant fines, bans on market access, and potential trade restrictions for non-conforming goods.
Regulatory Enforcement Body	UK Secretary of State, supported by designated authorities such as DEFRA.	Member State authorities, with oversight from the European Commission.
Focus on SMEs	SMEs may be exempt initially but could be included in later phases depending on secondary legislation.	SMEs face simplified compliance requirements but are not exempt from the regulation.
Geographical Scope	Focused on imports into the UK, specifically targeting high-deforestation-risk regions.	Global scope for any commodity entering or traded within the EU market.

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For businesses sourcing from regions with high deforestation risk, these regulations create overlapping but distinct compliance challenges:

Dual Compliance: Companies operating across the UK and EU must navigate two sets of requirements, ensuring both legality under the UK FRC provisions and deforestation-free sourcing for the EUDR.
Data and Traceability: The EUDR’s geo-location requirement is particularly stringent, requiring precise mapping of supply chains—a step beyond the UK’s due diligence approach.
Implementation Timelines: While EUDR deadlines are in discussion and looking likely to be confirmed to be December 2025 for large companies and June 2026 for SMEs, the UK FRC provisions’ implementation awaits further clarification, creating uncertainty for businesses.

How Interu Can Help

Interu’s traceability platform, built by the team at iov42, simplifies compliance by providing:

End-to-end Traceability: Track commodities across supply chains, helping achieve compliance through improved due diligence.
Geo-verified Data: Meet the EUDR’s strict geo-location requirements with confidence through Interu’s integration with satellite analysis provider, Orbify.
Due Diligence Reporting: Share, manage, store data on Interu and share via APIs to meet requirements expected by regulation bodies, like the EU’s Traces NT system.
Risk Assessment: By analysing verified data, users can identify and address risks in sourcing practices to avoid non-compliance and spot any gaps in their supply chains.

By integrating traceability across multiple regulatory frameworks, Interu ensures businesses are prepared for evolving standards in both regions - and beyond.

The UK Environment Act and EUDR are shaping the future of sustainable supply chains, setting high expectations for businesses to act responsibly. While their differences create challenges, they also present opportunities for companies to lead in sustainability.

Interu’s solutions are designed to bridge the gap, offering seamless compliance and empowering businesses to demonstrate their commitment to protecting our planet’s forests.

Ready to future-proof your supply chain? Contact us to learn more.

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Anna Roberts

Head of Market Development

Anna Roberts, a social technologist and Head of Market Development at iov42, specialises in scaling solutions to enhance trust within multi-party networks. With a background in strategy consulting, she played a pivotal role in developing bespoke simulation technologies for leading organisations before venturing into sustainable trade networks as a square rig sailor.