Update on the EU Deforestation Regulation (EUDR) in the HealthCare Sector

The EU regulation on deforestation-free supply chains (Regulation (EU) 2023/1115, or EUDR for short) presents companies with new challenges by requiring that commodities such as rubber, palm oil, soy, wood and cocoa are traced along the whole supply chain. While many industries are already working intensively on implementing the new requirements, the healthcare sector is facing particular difficulties: Many pharmaceutical products and medical devices contain such commodities. However, complex global supply chains make seamless traceability difficult.

In this update (see for a general overview: deforestation-free supply chains), we highlight the particular challenges of the EUDR for the healthcare sector, which commodities are affected and how companies in the healthcare sector can prepare for the new requirements.

Relevant Commodities in the HealthCare Sector

Rubber: Rubber is an important component of many medical products, and is found in some latex gloves, catheters, rubber seals and medical tubing, for example.

Palm oil: Palm oil can be an essential component in medicine capsules, ointments, creams and suppositories. It is also used in pharmaceutical excipients and food supplements.

Wood and Wood Products: Cellulose is used in the manufacture of tablets and as a filler in pharmaceuticals.

Soy: Soy is found in many pharmaceutical excipients, e.g. in the form of soy lecithin in tablets and capsules. It is also used in infusion solutions.

Cocoa: Cocoa butter is mainly used in certain suppositories and pharmaceutical ointments as it forms a good carrier substance.

The production of the commodities required for the manufacture of healthcare products - rubber, palm oil, wood, soy and cocoa - often contributes to deforestation, which is why companies that import these commodities and/or whose products fall under Annex I of the EUDR must trace the origin of these commodities and prove that they come from sustainable sources (see on the content of the obligations).

Challenges for the HealthCare Sector

Complex Supply Chains: The healthcare sector often faces complex supply chains in which commodities are processed across multiple intermediaries and countries. This makes it difficult to trace the exact origin of each commodity and makes the implementation of EUDR requirements challenging. If the EUDR due diligence cannot be carried out successfully, a strict ban on the sale of relevant commodities and products applies, see Art. 3 EUDR.

Sustainability Certificates: While there are already certifications for commodities such as palm oil (RSPO) or rubber (Forest Stewardship Council), these certifications do not automatically ensure EUDR compliance. Rather, companies themselves are ultimately responsible for ensuring compliance with the EUDR.

Geolocalization: The EUDR requires the documentation of the origin of commodities, including geolocalized data on the cultivation areas. This requires the use of modern technologies, such as GPS data, satellite imagery and GIS tracking, to ensure that the commodities originate from deforestation-free areas.

Liability Risks: Companies in the healthcare sector that produce EUDR-relevant products that may not comply with EUDR requirements risk high fines and other legal consequences. There is also a risk that products will be withdrawn from the market if EUDR compliance cannot be fully demonstrated.

Legal Uncertainty: The exact interpretation of the regulation and its requirements for companies are not yet clear in all areas. Although guidelines published by the EU Commission and a continuously revised FAQ portal provide assistance, their interpretation of the EUDR sometimes is far beyond its wording. This can lead to uncertainties in the implementation of the EUDR and pose additional legal challenges.

Preparing for the EUDR Requirements in the Healthcare Sector & Conclusion

The EUDR - as part of the European Green Deal - poses new challenges for companies in the healthcare sector, particularly with regard to the traceability and sustainability of their supply chains. Early analysis of commodity origin, closer collaboration with suppliers and digital solutions for traceability are crucial to ensure compliance with the EUDR. Existing certifications and internal control mechanisms should be reviewed to see whether they can be adapted to the EUDR requirements. The regulatory complexity in the healthcare sector makes things even more difficult - hardly any other industry is subject to similarly strict legal requirements. The fact that the application of the EUDR as a further compliance component was recently postponed by one year to the end of 2025 is little consolation here - the postponement was largely due to the poor preparation of affected companies and the EU Commission itself for the EUDR. Thus, the postponement is not associated with substantive changes to the EUDR. The time gained should therefore be used to develop a sustainable and legally compliant strategy that makes the affected companies “EUDR-ready”.