Europe’s new deforestation regulation (the EUDR) will saddle Germany’s timber industry with €1.8 billion in up-front costs and €1.2 billion in additional compliance costs every single year. That is according to the peak body of the country’s timber industry, the Hauptverband der Deutschen Holzindustrie (HDH), which surveyed more than 400 of the country’s timber supply chain.
“There is a threat of chaos with unforeseeable consequences,” according to Johannes Schwörer, HDH’s president. “The low level of implementation can paralyse the entire supply chain and bring the use of wood products to a standstill.”
According to Schwörer, just 39% of firms believe they are on track to fulfil EUDR requirements by year-end, warning that hundreds of timber companies now face exclusion from customer contracts, as buyers cannot afford the risk of non-compliance penalties. And even those who are confident in their own readiness warn that missing data from upstream suppliers poses a critical risk, potentially triggering supply bottlenecks, production slowdowns, and short-time work.
In practice, compliance demands extensive data entry across multiple systems. HDH members cite extra personnel costs as the primary burden, followed by expenses for software solutions and data exchange with partners. More than half expect to hire at least half a full-time position to manage EUDR reporting.
“The bureaucracy required by the EUDR within the EU is superfluous, because there is no deforestation in Germany and other European countries within the meaning of the regulation,” Schwörer said, adding that the EU’s forest cover—now 227 million hectares—and existing satellite monitoring and certification schemes are efficient safeguards.
Instead, Schwörer is urging Brussels to adopt a “zero-risk category” for wood sourced from regions with no deforestation threat: “If the wood comes from a country without a risk of deforestation, all data collection and transfer must be eliminated. The Commission must correct the regulation urgently.”
Already, thousands of equipment manufacturers—who rely on tyres, seals and conveyor belts—have warned Brussels that the EUDR risks throwing complex supply chains into chaos and undercutting Europe’s competitiveness on the world stage. That warning came from the German Mechanical Engineering Industry Association (VDMA), which, in a formal plea to the European Commission and German Ministry of Agriculture earlier this month, is pushing for a two-year postponement of the EUDR to allow Brussels to address “bureaucracy at its worst.”
Whilst Austria, one of the world’s largest producers of large-sized cross-laminated timber panels, is staring down the barrel of a 10% reduction in production if the EUDR comes into effect later this year. That is according to Markus Schmölzer, chairman of the Austrian Sawmill Association, who said, “Full-chain traceability is simply unworkable,” warning that “forest owners are already talking about suspending harvesting rather than drowning in reference numbers and paperwork.”
- To learn more about the EUDR’s country classification scheme, click here for Wood Central’s special feature. And to understand why transhipment can muddy the waters on compliance and enforcement, click here for more information.
