Comparisons and understanding between EUDR and CBAM

Although the EUDR (Anti-Deforestation Regulation) and the CBAM (Carbon Border Adjustment Mechanism) are two distinct tools of the EU Green Deal, they present interesting similarities while having different objectives and mechanisms.

Here's a comparison highlighting the similarities and differences:

Common Points / Similarities

Global Environmental Objective

Both regulations aim to achieve the EU's environmental and climate objectives through trade leverage. They seek to extend EU environmental requirements to imported products to prevent European consumption from harming the global environment (deforestation for EUDR, CO2 emissions for CBAM).

Extraterritorial Scope via Trade

Both mechanisms impose obligations based on production conditions outside the European Union for goods imported into the EU (and for EUDR, also those exported). They use access to the European single market as an incentive for more sustainable practices globally.

Obligations for Importers/Operators

The primary responsibility lies with the parties who introduce products onto the EU market (importers for CBAM, operators for EUDR). They are the ones who must collect information, carry out procedures, and ensure compliance.

Upstream Data Collection Requirement

Both systems require complex and verifiable data collection from suppliers and producers located outside the EU (geolocation/legality data for EUDR, embodied emissions data for CBAM).

Common Points (Continued) and Implementation

Centralized Information System

Both regulations rely on an electronic information system managed at EU level for the submission of declarations (Due Diligence Declaration for EUDR, CBAM Declaration).

Implementation by Member States

The application, controls and imposition of sanctions are the responsibility of the competent authorities designated by each EU Member State.

Phasing and Deadlines

Both regulations are recent and provide for transitional periods or deferred application dates to allow companies to adapt (reporting phase for CBAM before payments, specific deadlines for EUDR depending on the size of the company).

Key Differences / Comparisons

Appearance	EUDR	CBAM
Specific Objective	Target deforestation and forest degradation linked to specific commodities. The main challenge is the preservation of biodiversity and forest ecosystems.	Targeting greenhouse gas (GHG) emissions embodied in specific industrial products and preventing carbon dumping. The main challenge is to combat climate change and maintain the competitiveness of European industry subject to the EU ETS.
Main Mechanism	Based on an obligation of due diligence (information gathering, risk assessment/mitigation) and a ban on placing on the market/export if the products are not "zero deforestation" (after 12/31/2020) and legally produced.	Relies on a financial adjustment . Importers must purchase and surrender CBAM certificates to cover the embodied emissions of imported products, reflecting the EU ETS carbon price (with deduction of the carbon price already paid in the country of origin). It does not prohibit the importation of carbon-intensive products, but makes it more expensive.
Affected Products	Agricultural and forestry products (cattle, cocoa, coffee, palm oil, rubber, soybeans, wood) and their derivatives (leather, chocolate, furniture, paper, etc.).	Energy- and emission-intensive industrial products (cement, iron/steel, aluminum, fertilizers, electricity, hydrogen - with scope for expansion).
Type of Data Required	Geographic traceability data (GPS coordinates of plots), proof of non-deforestation and legality of production.	Quantitative data on direct and indirect GHG emissions during production, and information on any carbon price paid abroad.
Nature of the Principal Sanction	Possibility of product withdrawal/confiscation , potentially high fines (up to 4% of turnover). Market access is blocked if non-compliant.	Mainly financial penalties if the required number of certificates are not surrendered. Market access is not directly blocked for carbon-intensive products, but their cost increases.

In summary, although sharing a common philosophy of environmental action through trade and similar importer-based control mechanisms, the EUDR acts as a normative barrier based on production sustainability criteria (zero deforestation, legality), while the CBAM acts as a price mechanism aimed at balancing carbon costs between domestic production and imports for specific industrial sectors.

To support you on EUDR and CBAM, do not hesitate to contact the DT Master Carbon teams to propose our solutions.