The EUDR could reduce timber imports from high-risk deforestation countries (including Indonesia, Malaysia, and Brazil) by more than 25% by 2040 – and even peak at 38% if definitions are changed to include agricultural conversion (dubbed EUDR+). That is according to a new report, The European Union Deforestation Regulation: Implications for the Global Forest sector, which reveals that high-risk countries will struggle to find new markets for displaced timber unless they embrace mechanisms like EU Forest Law Enforcement Governance and Trade.
Led by Craig Johnston, Jingang Guo from the Louisiana State University Department of Agricultural and Agribusiness, and Jeffrey Prestemon from the US Forest Service, the researchers used the Forest Resource Outlook Model (FOROM) to simulate EUDR’s impact on production, trade, and pricing:
“The results indicate that high-deforestation countries, such as Brazil, Indonesia, and Malaysia, are expected to face significant reductions in roundwood production and exports, with downstream effects on sawn wood and panel prices.” At the same time, low-deforestation countries, including Canada (1.4% increase) and the United States (0.1% increase), may experience slight increases in production to meet EU demand.”
A new report from Craig Johnston, Jingang Guo and Jeffrey Prestemon has similated the impact of the EUDR on the global supply chain for timber-based products.
The EUDR will lead to a major shift in production as EU member states reduce risk
According to the study, Indonesia’s roundwood production could fall as much as 7% under the current EUDR setting and 6.8% under the EUDR+ setting. Indonesian lumber production could sink by 1-1.2% and panel production by 16% and 15.4%. At the same time, the new regulation could see Malaysia experience a decline of 8.5% in roundwood output under EUDR and 7% under EUDR+ settings. Finally, Brazilian roundwood production could drop by 7% under EUDR and 10.1% under EUDR+, whilst lumber and panel production could drop by 12.6%.
And whilst production in high-risk countries could drop, the EU is poised for slight gains in roundwood production as supply chains become EUDR-ready: “For example, Germany’s roundwood output is expected to rise 0.5% under EUDR and 1% under EUDR+, with minor lumber and panel production changes. (Whilst) Austria, Poland, and Latvia may also experience small but positive shifts.”
A significant impact on the volatility of timber prices.
The researchers also estimated that Brazilian roundwood prices will drop by 7% and 10.2% under EUDR and EUDR+ settings, whilst the cost of finished lumber (14.6% and 19.9%) and panels (7.9% and 10.3%) will rise under the new settings. And whilst prices will fluctuate in high-risk countries, prices in the European Union and North America are expected to remain relatively consistent:
“Germany’s roundwood prices (for example) are forecasted to rise 0.5% under EUDR and 1% under EUDR+, whilst lumber prices could increase 0.7% under EUDR and 1.1% under EUDR+. (Whilst) Panel prices in Latvia are projected to rise by 2.4% under EUDR and 2.6% under EUDR+.” In the United States, “roundwood prices are expected to rise by 0.1% under EUDR and EUDR+, while lumber prices are projected to increase by 0.7% and 1.1%. Panel prices are estimated to climb 0.6% under EUDR and 1% under EUDR+.”
The new research comes after Wood Central yesterday reported that Europe’s imports of tropical timber have sunken to a decade low, as confusion around the EUDR, changes to logging regulations and sky-high shipping costs have seen imports to the 27 EU member states sink to just 726,000 cubic metres, the lowest levels ever recorded by the International Tropical Timber Organization (IITO).
“In 2024, the EU27 cut its imports of tropical sawn wood by 14%… which marks only the second time in history that EU imports of tropical sawn wood have fallen below 800,000 cubic metres in a year. The only other instance was in 2020, during the first year of the pandemic, when imports totalled 784,000 cubic metres,” according to the International Tropical Timber Organization’s Tropical Timber Market Report (February 16 to 28, 2025).
- For more information on EUDR, visit Wood Central’s special feature here.
