The Deforestation Regulation (EUDR) could cut production volumes by 10%. Producers warn that the additional costs of complying with the regulation's requirements could run to many millions of euros, purely because of the bureaucratic burden. Nor is it clear what benefits will be gained...

Austria's CLT (cross laminated timber, explained at the end of the article) producers warn that the entry into force of the European Union's Deforestation Regulation (EUDR), and compliance with its provisions, could reduce production volumes by 10%. One of the world's largest producers of large-format CLT panels could face a 10% cut in output if the EUDR takes effect at the end of this year. According to Markus Schmelzer, chairman of the Austrian sawmill association: “Full traceability across the whole supply chain is simply not possible; forest owners are already talking about halting logging rather than drowning in assorted “reference numbers” and paperwork””.

Back in May 2025, at a meeting of the Council of European agriculture ministers, Austria and Luxembourg called for the EUDR to be simplified. They succeeded in winning several member states over to the idea. Austria's Minister for Agriculture and Forestry, Norbert Totschnig, said at the time: “We do not want to burden Europe's citizens with red tape; our aim is to fight illegal deforestation.” The minister criticised the recently completed deforestation risk assessment.

“Together with Luxembourg we will stand firm in pressing for the simplification of the Deforestation Regulation, as we have committed to do,” said N. Totschnig. “Since we live in an age that demands fair conditions, we need planning certainty across the value chain and practical implementation. Although the European Commission has drawn up guidelines, they are “well intentioned, but not legally binding.” N. Totschnig therefore called for amendments to the legislation, which in his view the EC should make as part of its initiative.

Under Ursula von der Leyen, the EC plans to cut the overall bureaucratic burden on businesses by around 25%. For small and medium-sized enterprises, EUDR-related reporting obligations are to be reduced by 35%.

The previous “Omnibus” package of measures focused on changes to supply chain legislation, exemptions in sustainability reporting, simplified environmental requirements and improved access to financing for farmers.

Norbert Totschnig voiced concern about the relatively recent deforestation risk assessment, which sorted countries into three risk levels: “Countries with a high risk of deforestation were rated as medium”, jeopardising the efforts of Austria (and of the Nordic and Baltic states) to uphold strict sustainability principles.

The minister called for this assessment to be improved. As the Latvian forestry and related industries portal www.zemeunvalsts.lv has previously reported, the European Commission's initial benchmarking list sorts countries according to their deforestation risk, namely “low”, “standard” or “high”, taking into account the production of the seven commodities covered by the Deforestation Regulation.

Austria is classified as “low risk”, while Brazil and Indonesia, known for extensive rainforest clearance, are classified as “medium risk”. The EUDR seeks to prevent products associated with a risk of deforestation from entering the European market or being exported from Europe.

Germany's agriculture minister, Alois Rainer, backed Luxembourg's efforts to reform the Deforestation Regulation, noting: “Europe's efforts to curb global deforestation are commendable, but their bureaucratic impact on many European countries is excessive.” The minister stressed that this level of red tape is unnecessary. In the negotiations on Europe's multiannual budget, which begin in the autumn, A. Rainer pressed for a strong common agricultural policy (CAP) with substantial financial support. The EC submitted its proposal back in mid-July.

Norbert Totschnig reiterated that funding for the CAP must be “an EU priority” in the next multiannual budget. Given the various geopolitical challenges, it is essential to secure adequate funding for the CAP in order to offset market volatility and safeguard security of supply.

Konrad Mylius, president of Austria's agricultural and forestry enterprises, said that implementing the EU Deforestation Regulation in its current form is not sustainable. “We appreciate Federal Minister Norbert Totschnig's commitment and welcome the initiative to develop practical solutions for countries where the risk of deforestation is demonstrably low. We also call for greater transparency regarding the risk assessment and the implementation of the regulation, so as to provide legal certainty for the businesses affected.”

Although Austria's softwood processing industry forecasts a 2% increase in production in 2025 and has spare processing capacity, industry leaders warn that the EUDR threatens the entire wood value chain. The German Mechanical Engineering Industry Association (VDMA), a significant supplier of building components, furniture, panels, paper and pellet products, will feel the impact, particularly during the peak demand expected in winter.

Many equipment manufacturers have warned that the EUDR could cause chaos in complex supply chains and erode Europe's global competitiveness. This view was expressed by the German Mechanical Engineering Industry Association (VDMA), which, in a formal appeal to the European Commission and the German Ministry of Agriculture, said that the EUDR is “bureaucracy at its worst”. Under the EUDR, companies must prove that every cubic metre of timber and timber products – from the untreated log to the finished item – has been obtained without deforestation, which means that thousands of unique reference numbers have to be generated and maintained at every stage of processing and supply. This is consistent with a recent study which calculated that Austria's initial costs of complying with the regulation exceed 200 million euros, with annual operating costs of around 65 million euros. Extrapolating these figures across the whole of Europe, the industry forecasts a cost burden of several billion euros with no clear or comprehensible benefit. Although the European Commission has sought to clarify the legal and operational uncertainties through guidelines, it has failed to reassure producers.

All of the above is why Austria's timber industry is urging Brussels either to suspend the EUDR or to revise it through the “Omnibus” legislative package in order to reduce the bureaucratic burden. Instead of imposing blanket requirements, it wants a risk assessment that targets high-risk regions and exempts low-risk producers such as Austria.

Despite the unfavourable conditions, Austrian softwood exports rose by 11% in the first half of 2025 compared with the same period in 2024, mainly thanks to strong demand from Italy and Germany. In 2024 it generated a production value of 3 billion euros, while the timber industry as a whole, with more than 1,300 companies and 25,600 employees, produced goods worth 9.28 billion euros.

* CLT – cross laminated timber is a subcategory of engineered wood panel products, made by gluing together at least three layers of sawn timber at an angle. It is similar to plywood, but with markedly thicker layers (or lamellas).

The grain direction of each layer is usually turned 90 degrees from that of the adjacent layers and glued to the wide faces of each board, normally symmetrically, so that the outer layers are identically orientated. Most often the number of layers is odd, but configurations with an even number also exist (these are then arranged symmetrically). Ordinary timber is an anisotropic material, meaning that its physical properties vary according to the direction in which force is applied. By gluing the wood layers at right angles, the panels gain better structural rigidity in both directions.

CLT differs from glued laminated timber, a product in which all the layers are orientated in the same direction. The first patent resembling CLT was developed in the 1920s by Frank J. Wall and Robert L. Watts in Tacoma, USA. Many sources, however, date the first patent to 1985, when it was presented in France. Significant advances were later made in Austria, when Gerhard Schickhofer presented his doctoral thesis on CLT in 1994.