EU Deforestation Regulation: Impact on Palm Wax and Wood Components

The EU Deforestation Regulation (EUDR), Regulation (EU) 2023/1115, entered into force on 29 June 2023 and becomes applicable to large operators on 30 December 2025, with small and medium enterprises (SMEs) given an additional six months until 30 June 2026. For the fragrance and candle industry, the EUDR directly affects products containing palm-derived waxes, wooden components, and certain plant-based raw materials. B2B buyers placing these products on the EU market must establish due diligence systems before the compliance deadline.

Scope: Which Fragrance Products Are Affected?

The EUDR covers seven commodity groups: cattle, cocoa, coffee, oil palm, rubber, soya, and wood. Within the fragrance and candle sector, the following materials fall within scope:

• Palm wax candles: Palm-derived wax (hydrogenated palm oil, palm stearin) is classified under oil palm products. Any candle using palm wax as a base or blend component is covered.
• Wooden lids and accessories: Wooden candle lids, diffuser caps, decorative wood elements, and wooden wicks fall under the “wood” commodity category.
• Wooden packaging: Gift boxes, crates, or display units made from timber.
• Paper and cardboard packaging: Derived from wood pulp, these are covered under the wood category.
• Certain essential oil carriers: If derived from palm oil fractions (e.g., palm-based emollients used in reed diffuser bases).

Products that are entirely synthetic (paraffin wax candles, glass vessels, metal lids) or derived from non-covered commodities are outside EUDR scope.

Core Obligations for Operators

Under Article 3 of the EUDR, operators (defined as entities that first place relevant products on the EU market) must ensure three conditions before placing products on the market:

1. Deforestation-free: The product must not contain, have been fed with, or have been made using relevant commodities produced on land deforested after 31 December 2020.
2. Legality: The product must comply with all relevant legislation of the country of production, including land use rights, environmental protection, labor rights, and tax regulations.
3. Due diligence statement: The operator must submit a due diligence statement via the EU Information System before placing the product on the market.

Due Diligence Requirements

Articles 8 through 12 of the EUDR specify the due diligence system operators must implement:

Information Collection (Article 9)

Operators must collect and retain for five years:

• Product description, including trade name and HS code.
• Country of production.
• Geolocation coordinates of all plots of land where the relevant commodities were produced. For plots exceeding 4 hectares, polygon coordinates are required; for smaller plots, a single latitude/longitude point with six decimal places suffices.
• Name and address of suppliers and customers.
• Evidence that the product is deforestation-free (satellite imagery, aerial surveys, or equivalent).
• Evidence of compliance with country-of-production legislation.

Risk Assessment (Article 10)

Operators must assess the risk that non-compliant products enter their supply chain, considering:

• Country risk classification assigned by the European Commission (low, standard, or high risk).
• Presence of forests and indigenous peoples in the production area.
• Reliability of information sources.
• Complexity of the supply chain.
• Risk of mixing with non-compliant materials.

Risk Mitigation (Article 11)

Where risk is identified as non-negligible, operators must implement mitigation measures such as additional audits, third-party verification, or supplier changes before placing products on the market.

Penalties for Non-Compliance

Article 25 of the EUDR establishes maximum penalties that member states must enforce:

• Fines of at least 4% of the operator’s total annual EU turnover.
• Confiscation of non-compliant products and revenues.
• Temporary exclusion from public procurement (up to 12 months).
• Temporary prohibition from placing products on the EU market.

Documentation Buyers Should Request from Suppliers

To satisfy EUDR due diligence obligations, B2B buyers sourcing palm wax candles or wooden components from manufacturers outside the EU should obtain:

1. Geolocation data for palm plantations or timber harvest areas, in a format compatible with the EU Information System (GeoJSON, KML, or shapefile).
2. Supply chain mapping identifying every intermediary between the plot of land and the finished product.
3. Land use documentation proving the production area was not deforested after 31 December 2020 (historical satellite imagery, land title records).
4. Legality evidence including harvest permits, environmental impact assessments, labor compliance records, and tax filings from the country of origin.
5. Mass balance or segregation certificates (e.g., RSPO certification for palm derivatives, FSC/PEFC chain-of-custody for wood) as supporting evidence, though certification alone does not satisfy EUDR requirements.
6. Supplier due diligence declarations confirming compliance with Articles 3 and 9 obligations.

Practical Steps for Fragrance Brands

• Identify all SKUs containing palm-derived or wood-derived materials. Map these against HS codes listed in EUDR Annex I.
• Engage suppliers immediately to collect geolocation data. Plantation-level traceability for palm oil derivatives can involve hundreds of smallholder plots, requiring significant lead time.
• Consider transitioning to alternative materials where traceability is impractical: soy wax, coconut wax, or fully synthetic waxes for candles; bamboo (not covered by EUDR as it is a grass, not wood) or metal for lids and accessories.
• Register on the EU Deforestation Information System and test due diligence statement submission procedures before the compliance deadline.
• Build EUDR compliance clauses into supplier contracts, including obligations to provide updated geolocation data and notify buyers of any supply chain changes.

How Aromiso Supports EUDR Compliance

Aromiso maintains traceability documentation for palm wax and wooden components used in our production. We work with RSPO-certified palm wax suppliers and FSC-certified wood sources, and we collect plantation-level geolocation data to support our buyers’ EUDR due diligence statements. For buyers seeking to eliminate EUDR exposure entirely, we offer soy wax, coconut wax, and metal-component alternatives that fall outside the regulation’s scope.

The EUDR represents a fundamental shift in how forest-risk commodities enter the EU market. Fragrance brands that establish robust traceability systems before the 2025-2026 deadlines will maintain uninterrupted market access, while those that delay face potential product seizures and significant financial penalties.