EU Deforestation Law Nudges Timber Trade, Indonesia Probe Shows, but Risks Persist

Why It Matters

The findings highlight that the EUDR is already reshaping supply‑chain behavior, yet unfinished enforcement leaves a sizable deforestation footprint in EU‑bound timber, threatening both market credibility and forest conservation goals.

Key Takeaways

• EU Deforestation Regulation already prompting supplier contract revisions
• High‑risk Indonesian timber still entered EU in 2025 despite cuts
• Fepco and Dekker Hout adopted stricter traceability beyond SVLK
• Legal deforestation accounts for 58% of Indonesia’s 2025 forest loss

Pulse Analysis

The EU Deforestation Regulation marks a watershed moment for global timber trade, expanding the scope of compliance from illegal logging to any wood linked to forest clearance. Set to become fully enforceable at the end of 2026, the EUDR requires importers to verify that products are free from deforestation, regardless of domestic legality. This shift forces European firms to scrutinize every link in their supply chain, creating a market incentive for producers in timber‑rich nations like Indonesia to adopt more transparent, verifiable sourcing practices.

Company responses illustrate both progress and gaps. Belgian‑based Fepco International has overhauled its sourcing contracts, demanding GPS coordinates, harvesting licences, and transport documents, while Dutch importer Dekker Hout has suspended shipments pending deeper due‑diligence reviews. These moves go beyond Indonesia’s SVLK legality certification, which only confirms legal compliance and does not guarantee environmental sustainability. The heightened scrutiny, however, is uneven; trade data reveal that sizable volumes of high‑risk timber still entered the EU in 2025, indicating that many suppliers can evade detection through opaque intermediaries or incomplete documentation.

The broader implications extend to forest governance in Indonesia and other producer countries. With 58% of 2025 deforestation occurring legally within concessions, existing regulatory frameworks fall short of protecting remaining primary forests. The EUDR’s pressure is prompting at least 25 producer nations to launch national traceability and land‑mapping initiatives, yet effectiveness remains uncertain. Robust enforcement, coupled with reforms to Indonesia’s SVLK system and stronger on‑the‑ground monitoring, will be essential to close loopholes and ensure that the regulation delivers its promised environmental and market benefits.