EU Regulation Updates Businesses Must Know For 2025

2025 promises to be another challenging year for businesses transacting in the EU. Updates to several key pieces of legislation are set to keep compliance managers and other leaders on their toes.

Regulations covering labour practices, environmental impacts, and product transparency will progress and hit key milestones which businesses importing into or exporting out of the EU will need to be prepared for.

While implementation timeframes vary, the extra demands these regulations will place on businesses mean that preparation for compliance must begin now. Being forewarned and knowing exactly what to expect is the safest way for compliance managers to protect themselves and their companies when enactment begins.

If you’re responsible for compliance, procurement, or sustainability at a business operating in the EU, these are the 2025 EU regulation updates you need to know.

1. EU Deforestation Regulation (EUDR)

What it is

The EUDR prohibits importing into or exporting out of the EU products associated with deforestation. It covers commodities including cattle, coffee, cocoa, wood, rubber and soy. Businesses which don’t comply risk fines of at least 4% of their EU turnover and loss of market access.

Similar legislation is in development in other geographies, particularly the UK Forest Risk Commodity Regulation, which also seeks to ban trade in deforested goods.

Current status

In December 2025, the EUDR enters into force, following a one-year extension proposed by the European Commission and agreed by the EU Parliament and the EU Council.

Guidelines for compliance were published by the European Commission in September 2024, specifying that information provided by businesses must be verified, blending of products using mass balance must be avoided, and certifications must be reliable. The guidelines recommend the use of chemical analysis to verify product traceability.

How to prepare

As part of the due diligence statements they must submit, businesses are obliged to precisely geo-locate the specific plots of land involved in the production or farming of their commodities. Businesses should conduct an in-depth analysis of product lines to confirm geographic sourcing patterns and identify if any of their products may be at risk.

Businesses with existing traceability programs should review these now to evaluate whether they adequately meet the requirement to prove product origin. Programs such as digital mapping or blockchain, which track the path of products through a supply chain, but don’t prove the origin of such products, may need to be supplemented with an additional origin verification tool, such as Oritain.

2. Corporate Sustainability Due Diligence Directive (CSDDD)

What it is

The CSDDD requires companies conducting business in Europe to identify and mitigate adverse environmental and social effects from their own operations and those of supply chain partners. Failure to comply can result in financial penalties and being liable for damages caused.

Current status

The Directive received final approval in July 2024. Member States must now transpose it into national law and communicate texts to the European Commission by July 2026.

How to prepare

Under the regulation, companies must carry out periodic assessments of processes, policies, and procedures throughout their value chains. Businesses should prepare for this by integrating due diligence processes into their corporate policies and risk management systems that allow them to identify and address human rights and environmental impacts.

Begin collating clear records of the upstream and downstream process, mapping supply chains and conducting an in-depth assessment of the company’s operations, focusing specifically on any negative practices concerning human rights or environmental abuses. Introduce remediation measures where necessary.

3. EU Forced Labour Regulation

What it is

The EU forced labour ban prohibits the trade of products in the EU that are made with forced labour. The regulation applies to all products in any sectors, at any stage of production. Noncompliance can result in products being withdrawn from the market.

Current status

The regulation entered into force in December 2024. The EU Commission is the enforcement authority if suspicion of forced labour is outside the EU, and the relevant Member State will be the enforcement authority if suspicion of forced labour is inside the EU. By the end of 2025, Member States must confirm their designated competent authorities.

In mid-2026, the Commission will publish guidelines for compliance, before the Regulation begins enforcement from Q4 2027 and will make available a database of forced labour risk areas and products.

How to prepare

Brands and retailers should revisit their due diligence and risk management strategies. Identify and evaluate high-risk origins involved in sourcing all the different components and raw materials to build up a clear picture of the labour and sourcing practices involved in production.

Ensure detailed records of manufacturing processes are maintained and verifying that representations made by suppliers are accurate. Reinforce (or introduce) procurement policies and supplier codes of conduct.

4. Corporate Sustainability Reporting Directive (CSRD)

What it is

The CSRD requires companies operating within the EU to report on a broad range of environmental, social, and governance (ESG) issues, including disclosing the financial and environmental impacts of their operations.

Current status

The CSRD is set to take effect in 2025. Companies will need to include detailed information around sustainability performance and governance metrics, verified by third parties, in their annual reports from 2026.

How to prepare

Businesses should evaluate current reporting mechanisms to identify and address gaps between the regulation’s requirements and the currently available information. Introduce measures to capture environmental impacts, including carbon footprints, resource use, and impacts on pollution, water, biodiversity and ecosystems. Ensure dedicated sections summarizing findings are included within all corporate reporting.

5. Digital Product Passport (DPP)

What it is

The Digital Product Passport is part of the Ecodesign for Sustainable Products Regulation, and requires all products placed in the EU to have a digital record detailing the product’s environmental footprint throughout its lifecycle from raw material sourcing to production.

While initially only covering the EU, the regulation could potentially trigger lawmakers in other geographies to adopt DPPs in the future.

Current status

The DPP will be rolled out by industry between 2026-2030, though this is expected to be sooner for textiles given the industry’s high impact. In mid-2025 the first draft of the act is expected to be released for textiles, which is then expected to be published in 2026.

How to prepare

Begin collecting information and documentation to verify each product’s provenance and manufacturing processes. Carry out a gap analysis to assess your current state of readiness and help identify areas that require immediate focus. Allocate resources as needed, for example to validate product origin claims, to ensure DPP requirements are met.