The UK’s new mandatory deforestation due diligence framework is creating fresh compliance challenges for packaging companies sourcing timber, paper and fibre-based materials from China, as businesses attempt to navigate potentially conflicting regulatory requirements in two major markets.

Following the UK Government’s confirmation in June 2026 that businesses trading in forest-risk commodities must demonstrate their supply chains do not contribute to illegal deforestation, companies are reassessing sourcing strategies and compliance processes.

Packaging Supply Chains Face Dual Regulatory Pressure

The new UK framework requires businesses placing regulated forest-risk commodities on the UK market to carry out due diligence on their supply chains.

However, companies sourcing timber and paper products from China may also face restrictions under China’s Decree 834, introduced in 2026, which limits certain forms of supply chain investigations and information gathering.

Industry observers note that the two regulatory frameworks could create practical challenges for businesses attempting to satisfy both jurisdictions simultaneously.

Timber and Paper Products Under Greater Scrutiny

The issue is particularly significant for the packaging sector because many manufacturers rely heavily on timber-derived raw materials.

According to industry data cited in the report:

• The UK imports approximately £777 million worth of timber and wood-based products from China annually.
• China supplies around 53% of the UK’s plywood imports.
• China remains one of the world’s largest suppliers of timber, paper and fibre-based products.

For packaging manufacturers, these materials form an important part of paper packaging, corrugated products and other fibre-based packaging applications.

Existing Compliance Burden Continues to Grow

Many packaging businesses have already been adapting to the European Union Deforestation Regulation (EUDR), which introduced stricter traceability and due diligence requirements for forest-based products entering the EU market.

The UK’s new framework adds another layer of compliance for companies operating across multiple jurisdictions.

Businesses may now need to balance:

• UK deforestation due diligence requirements
• EU EUDR obligations
• Chinese regulatory restrictions
• Existing ESG reporting requirements

Companies Review Supply Chain Strategies

Industry analysts suggest businesses affected by the new rules should strengthen supply chain risk assessments and closely monitor future regulatory developments.

Potential responses may include:

• Increasing supplier risk assessments.
• Diversifying sourcing locations.
• Expanding recycled fibre use.
• Improving traceability systems.
• Reviewing long-term procurement strategies.

Some companies may also evaluate greater use of recycled paper and recovered fibre to reduce exposure to virgin forest-based raw materials requiring extensive due diligence.

Smaller Businesses Could Face Greater Challenges

The UK framework applies to businesses operating in Great Britain with annual turnover above £1 million, potentially bringing more small and medium-sized companies into formal due diligence requirements.

While previous assessments of the EUDR suggested relatively modest compliance costs for larger businesses, industry experts note that smaller companies may face proportionally higher administrative and operational expenses when implementing new traceability systems.

Packaging Industry Adapts to Evolving Trade Rules

For packaging manufacturers and converters, the latest regulatory developments highlight how environmental legislation is increasingly influencing global sourcing decisions alongside traditional considerations such as cost, quality and supply security.

As governments continue strengthening sustainability requirements, businesses using timber, paper and other fibre-based materials are likely to place greater emphasis on supply chain transparency, regulatory compliance and risk management while seeking to maintain stable international sourcing networks.

Last Updated on 03/08/2026 by Jota Machinery