One of the world’s largest producers of large-sized cross-laminated timber panels is staring down the barrel of a 10% reduction in production if the European Union’s signature deforestation regulation (the EUDR) comes into effect later this year. That is according to Markus Schmölzer, chairman of the Austrian Sawmill Association, who said, “Full-chain traceability is simply unworkable,” before adding that “forest owners are already talking about suspending harvesting rather than drowning in reference numbers and paperwork.”
Although Austria’s softwood industry anticipates a 2% output increase in 2025 and has spare processing capacity, industry leaders warn that the EUDR poses a threat to the entire wood value chain. Last week, Wood Central revealed that the powerful German Mechanical Engineering Industry Association (VDMA) – instrumental in providing the building components, furniture, panel boards, paper and pellet products – would feel the pinch, especially during peak winter demand.
Under the EUDR, companies must prove that every cubic meter of timber and wood products—from raw log to finished good—is deforestation-free. That entails generating and maintaining thousands of unique reference numbers across each processing and delivery stage. “The volume of data alone is impossible to manage,” Schmölzer said.
A Finnish study estimated that Austria’s upfront compliance costs exceed €200 million, with annual running expenses of approximately €65 million. Extrapolated across the EU, the industry projects multi-billion-euro burdens without clear environmental benefits. And whilst the European Commission has sought to clarify legal and operational uncertainties through guidance notes, it has failed to reassure producers.
As a result, the Austrian wood industry is urging Brussels to suspend the EUDR or overhaul it through an “omnibus” legislative package to reduce red tape. Instead of blanket requirements, they want risk-based oversight that targets high-risk regions, that also exempts low-risk producers, such as Austria.
At the Council of EU Agriculture Ministers in Brussels earlier this year, Austria’s Forestry Minister Norbert Totschnig warned, “We cannot burden European operators with bureaucracy; our aim is to combat illegal deforestation.” Franz Teuschler, chairman of the Austrian Timber Trade, calls for reinstating elements of the former EU Timber Regulation (EUTR), which enjoyed majority support in the European Parliament and is cited in Germany’s coalition agreement.
Despite headwinds, Austria’s softwood exports increased by 11% in the first half of 2025 compared to the same period in 2024, primarily driven by strong demand from Italy and Germany. In 2024, it generated €3 billion in production value, while the broader wood industry—more than 1,300 companies with 25,600 employees—produced €9.28 billion in goods and recorded a trade surplus of €1.39 billion.
The latest push comes after Wood Central reported that American negotiators are pushing Brussels to create a “negligible risk” category for U.S. timber products—a move exporters argue would simplify due diligence and avert threatened tariffs on roughly $3 billion of wood shipments to Europe. As it stands, Brussels has already delayed the EUDR’s enforcement by one year—postponing its rollout from January to December 2025—with a Commission-commissioned study report earlier this year warning that any further delay could result in an additional 230,000 hectares of global forest being lost to deforestation.
- To learn more about the EUDR’s country classification scheme, click here for Wood Central’s special feature. And to understand why transhipment can muddy the waters on compliance and enforcement, click here for more information.
