EUDR Compliance: Understanding your Company’s Position in Textiles

After exploring how the European Union Deforestation Regulation (EUDR) is reshaping the wood and forestry, food and beverage, and chemicals industries, we now turn our attention to textiles—a sector that touches nearly every aspect of daily life.

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Textiles are everywhere: in the clothes we wear, the furniture we use, protective gear, healthcare materials, and even the interiors of vehicles and buildings. Yet their environmental footprint is growing rapidly. In the EU, textile consumption ranks fourth in terms of environmental and climate impact, following food, housing, and mobility. It also places third in water and land use, and fifth in both raw material usage and greenhouse gas emissions.

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This blog builds on the insights shared in our updated EUDR Playbook and our ebook on mastering EUDR risk assessment. While the playbook offers a wide-angle view of the regulation, each industry—including textiles—faces its own unique path to compliance.

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For the textile sector, two commodities stand out under the EUDR: leather (cattle) and rubber. Understanding their specific regulatory requirements is essential. Surprisingly, materials like cotton are not yet covered by the regulation, despite their considerable environmental toll. However, the European Commission is expected to revise the scope of the EUDR based on ongoing assessments.

Due Diligence Requirements

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To comply with the EUDR, companies must file due diligence statements electronically through a centralized EU registry. These are reviewed by both the European Commission and national authorities. To help with the process, a digital Registry System has been launched to guide operators and traders through the required steps of preparing and submitting their due diligence statements.

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What must be included in a due diligence statement?

• Operator and product information.
• The country of origin and exact geolocalization of the land used to produce raw materials.
• Reference to previous due diligence statement’s submissions, if applicable, to avoid duplication.

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Simplifying compliance:

• Reuse of Statements: Larger companies (non-SMEs) working with EUDR-regulated materials can reference previous compliant submissions, as long as they ensure that the original data is correct.
• Batching Shipments: One statement can cover multiple shipments or product batches, provided all included items meet the due diligence requirements.

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On May 22, 2025, the EU adopted a benchmarking system to classify countries by deforestation risk. This tool supports both risk assessment and regulatory enforcement. Countries are categorized as high, standard, or low risk. For example, Belarus, North Korea, Myanmar, and Russia are considered high risk. Brazil and Indonesia are listed under standard risk.

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Understanding Your Company's Role in the Supply Chain

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Under the EUDR, companies fall into two main categories:

• Operators: Companies that introduce products into the EU market for the first time. They carry the most extensive due diligence obligations.
• Traders: Companies that buy and sell EUDR-regulated products without being the first to place them on the market. Their responsibilities are lighter, but they must ensure upstream compliance.

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Scenarios

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Scenario 1: Domestic Rubber in Apparel Production

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• A small EU-based rubber plantation owner (SME upstream operator) signs a contract with a major clothing brand to supply raw latex (HS 4001), which will be used in the production of elastic fibers for garments. By transferring ownership of the latex after collection, the plantation owner becomes the first to place natural rubber on the EU market. Under the agreement, the clothing brand is authorized to submit the required due diligence statement in the EU’s Information System on the plantation owner’s behalf. However, the plantation owner remains responsible for ensuring that the rubber meets all EUDR compliance requirements.

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• The major clothing brand processes the raw latex into elastic threads and integrates them into apparel products such as sportswear and undergarments (e.g., HS 6109, HS 6115). Some of these garments are exported outside the EU, while others are sold within the EU to a fashion retail chain. Because the clothing brand introduces rubber-derived products into the EU market and also exports them, it must submit two due diligence statements. However, since the raw latex has already been verified for compliance, the brand can reference the original due diligence statement submitted on behalf of the plantation owner.

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• The fashion retail chain (non-SME trader) purchases the finished garments from the clothing brand and sells them across the EU. Even though the rubber component has already undergone due diligence, the retailer must also submit a due diligence statement, confirming that previous compliance checks have been conducted. To do so, it can reference the clothing brand’s statement but must ensure all regulatory requirements are fully met.

Scenario 2: Leather in Fashion Goods

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• A small EU-based leather processor (SME upstream operator) sources semi-processed hides (HS 4104) from an EU tannery that has already imported and placed them on the EU market. Since the hides have already been placed on the market, the SME processor is not responsible for conducting due diligence at this stage. The leather processor finishes the hides into two products: high-grade leather for garments (HS 4107) and offcuts for accessories. As an SME upstream operator, the leather processor is not required to submit a due diligence statement but must ensure that their sourcing complies with the EUDR requirements.

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• The finished leather is sold to a large fashion manufacturer (non-SME trader), which uses it to produce leather jackets and apparel (e.g., HS 4203, HS 4202). Even though the leather was already placed on the market, the fashion manufacturer must submit a due diligence statement, referencing the processor’s sourcing information to confirm compliance.
• Meanwhile, the offcuts are sold to a local workshop that produces small leather goods like keychains and bracelets. These items fall outside the scope of current EUDR requirements. However, if the workshop had imported the hides or leather from outside the EU directly, it would have been required to submit a due diligence statement regarding the leather’s origin and traceability.

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Scenario 3: Leather originated from domestic cattle

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• A small EU-based cattle farm (SME upstream operator) raises and sells live cattle (HS 0102 29) to a meat processing company. As the first actor to place cattle on the EU market, the farm is responsible for conducting due diligence and submitting a due diligence statement in the EU’s Information System.

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• The meat processing company slaughters the cattle and produces two products: fresh or chilled beef (ex HS 0201) and raw hides and skins (ex HS 4101). As a non-SME downstream operator transforming relevant products, the processor must submit due diligence statements for both outputs, referencing the farm’s statement and verifying that the initial compliance requirements have been met.

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• The beef is sold to a large supermarket chain, which distributes it to customers across the EU. Since the meat was already placed on the market, the supermarket is considered a non-SME trader and must still submit a due diligence statement, referencing the processor’s submission and confirming that the chain of compliance remains intact.

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• Meanwhile, the raw hides are sold to a tannery, which processes them into finished leather (HS 4107) for the textile and fashion industry. The tannery is a non-SME downstream operator, as it transforms a relevant product into another relevant product and places it on the EU market. It is therefore required to submit a due diligence statement, referencing the meat processor’s declaration and verifying regulatory compliance.

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• Finally, the tannery sells the finished leather to a small leather goods manufacturer, which uses it to produce items like handbags, belts, and footwear. Since these finished goods (e.g., HS 4202, HS 6403) are not currently listed under the EUDR, the SME manufacturer has no due diligence obligations. However, if the leather had been imported from outside the EU, the manufacturer would need to submit a due diligence statement with geolocation and risk assessment data for the leather’s origin.

Leveraging Technology for EUDR Compliance

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Complying with the EU Deforestation Regulation (EUDR) requires more than policy awareness—it demands reliable, verifiable, and interoperable data across global supply chains. That’s where Finboot steps in.

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In partnership with OpenAtlas, Finboot offers a complete digital solution that empowers companies to meet EUDR obligations with accuracy, speed, and confidence. By integrating OpenAtlas’ VANTAGE-X remote sensing capabilities with Finboot’s MARCO Track & Trace blockchain platform, businesses can manage compliance efficiently—while laying the foundation for broader sustainability goals. Here’s how the joint solution works:

• Geolocation compliance, simplified: VANTAGE-X leverages satellite data to pinpoint sourcing locations, supporting the geospatial verification required under EUDR.
• Data you can trust: MARCO T&T’s blockchain infrastructure guarantees tamper-proof records of supply chain transactions, ensuring traceability and auditability from origin to market.
• Interoperable data exchange: Critical information—such as commodity type, species, origin, and harvest date—is captured, shared, and stored in a secure and structured format.
• Streamlined GEOJSON submission: To meet EUDR’s technical demands, our platform supports GEOJSON file generation through two flexible paths:
  
  • Suppliers can upload coordinates and land data via a our Supplier Portal, which provides an intuitive interface guiding them through the submission process
  • Enterprises can automate data submission through direct system integration

Whether your suppliers are fully digital or just beginning the journey, MARCO T&T bridges the gap—ensuring every stakeholder can participate in a deforestation-free supply chain.

And EUDR is just the beginning. MARCO Track & Trace’s modular design means companies can scale compliance across evolving regulations like CBAM, ESPR, PPWR, and others—all within a single, future-ready platform.

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