Rubber industry’s readiness for EUDR compliance

The Rubber Development Department with the technical support of the Survey Department has launched a nationwide initiative to map all small-scale rubber plantations using geographic coordinates in order to comply with new European Union (EU) regulation on deforestation-free imports. Under the initiative, each rubber-growing plot will be digitally recorded, after which farmers will be issued QR codes free of charge. The codes will be required when selling rubber to exporters targeting EU markets.

The EUDR is a major legislative shift to reduce the EU’s contribution to global deforestation and forest degradation. The regulation was formally adopted on 31 May 2023, and entered into force on 29 June 2023. The application deadlines were postponed by one year, with current deadlines set for 30 December 2025, for larger and medium companies, and 30 June 2026, for SMEs. The regulation by the 27-member-state political and economic union requires companies trading in cattle, cocoa, coffee, oil palm, rubber, soya and wood, as well as products derived from these commodities, to conduct extensive diligence on the value chain to ensure the goods do not result from recent (post-31 December 2020) deforestation, forest degradation or breaches of local environmental and social laws. 

From 30 December 2025 (or 30 June 2026 for micro or small businesses), it will be prohibited to place relevant products on the EU market, or export them from the EU, unless they are deforestation-free, produced in accordance with the relevant legislation of the country of production, and covered by a due diligence statement indicating no more than a negligible risk of non-compliance. The EUDR is a regulation, not a certification, making it a legal requirement rather than a voluntary standard.

According to the Institute of Policy Studies (IPS), during 2024, Sri Lanka exported 27 different rubber and rubber-based products worth $ 337.79 million to the EU. The products include solid or cushion tyres, gloves, mittens and mitts, new pneumatic tyres, and articles of vulcanised rubber. Between 2022 and 2024, Sri Lanka exported an average of $ 329 million worth of EUDR-covered products to the EU annually, with natural rubber products accounting for 97.5% of this value. Although the US is the largest export market of the island’s rubber industry, increased penetration to the EU is advisable given the unpredictable trade policy of the Trump administration. In such a context, compliance with EUDR is imperative for the continuity and stability of the rubber industry. 

Moreover, between 30% and 40% of the country’s rubber exports are directed to the region. Compliance with EUDR can be used as a competitive advantage to boost the attractiveness of Sri Lankan rubber products in the European market by capitalising on the preferential market access granted by the GSP+ concession.

Larger rubber plantation companies and major product manufacturers in Sri Lanka have already begun aligning with the EUDR and related global standards such as REACH compliance and net-zero carbon targets. Many implement traceability systems and secure sustainability certifications to safeguard access to key export markets. However, over 75% of the country’s rubber supply comes from SME farmers and they require immediate assistance to meet the stringent standards imposed by the EU. This gap poses a significant risk to Sri Lanka’s ability to maintain its EU market presence. Most rubber exporting companies in Sri Lanka have had to invest in their entire supply chains to ensure compliance, as village-level collectors and suppliers often lack the resources or motivation to implement EUDR requirements independently.

Sri Lanka has several promising opportunities in the context of EUDR compliance. The South Asian state being classified by the EU as a ‘low-risk’ country offers a significant advantage, resulting in fewer inspections than high-risk and standard-risk countries like Myanmar and Cambodia respectively. This favourable classification, supported by Sri Lanka’s existing environmental protection practices, gives the country a competitive edge. EUDR compliance also ensures continued access to the EU market, with the added potential for price premiums on deforestation-free rubber products.