Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade

Yuanhui Hu; Qian Meng; Neng Chen; Mei Yuan; Jie Xia

doi:doi:10.11648/j.ajere.20251004.14

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Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade

Yuanhui Hu, Qian Meng^*

, Neng Chen, Mei Yuan, Jie Xia

Published in American Journal of Environmental and Resource Economics (Volume 10, Issue 4)

Received: 20 October 2025 Accepted: 2 November 2025 Published: 9 December 2025

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Abstract

This study provides a comprehensive, quantitative forecast of the dynamic impact of the European Union Deforestation Regulation (EUDR) on forest product exports from nine major Asia-Pacific economies to the EU market. To address the complexity of this policy shock, we develop a novel two-stage forecasting framework that integrates LASSO regression for high-dimensional variable selection with OLS modeling. This approach generates dynamic monthly projections from October 2025 to December 2027, simulating the policy’s effect by combining a historical proxy from the European Union Timber Regulation (EUTR) with a calibrated “intensity multiplier” based on the EUDR country-risk classification. Our projections reveal a distinct multi-phase adjustment process across the region: an immediate, sharp contraction in Q4 2025, followed by a period of significant volatility and supply chain disruption throughout 2026, and an uneven recovery in 2027. The findings underscore substantial heterogeneity in impacts driven by the EUDR risk-based framework. Standard-risk countries, such as Indonesia and Malaysia, are projected to face severe volatility and suppressed growth trajectories, with Malaysia’s exports showing particular vulnerability. In contrast, some smaller, low-risk nations like the Philippines may capitalize on a substitution effect, gaining market share as larger suppliers struggle with compliance. The study concludes that the EUDR acts as a powerful disruptive force, reshaping competitive dynamics and necessitating urgent policy responses, including enhanced traceability infrastructure and strategic market diversification, for Asia-Pacific exporters.

Published in	American Journal of Environmental and Resource Economics (Volume 10, Issue 4)
DOI	10.11648/j.ajere.20251004.14
Page(s)	149-160
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2025. Published by Science Publishing Group

Keywords

EU Deforestation Regulation (EUDR), Forest Product Trade, Asia-Pacific, Time-series Forecasting, LASSO

References

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APA Style

Hu, Y., Meng, Q., Chen, N., Yuan, M., Xia, J. (2025). Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade. American Journal of Environmental and Resource Economics, 10(4), 149-160. https://doi.org/10.11648/j.ajere.20251004.14

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ACS Style

Hu, Y.; Meng, Q.; Chen, N.; Yuan, M.; Xia, J. Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade. Am. J. Environ. Resour. Econ. 2025, 10(4), 149-160. doi: 10.11648/j.ajere.20251004.14

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AMA Style

Hu Y, Meng Q, Chen N, Yuan M, Xia J. Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade. Am J Environ Resour Econ. 2025;10(4):149-160. doi: 10.11648/j.ajere.20251004.14

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@article{10.11648/j.ajere.20251004.14,
  author = {Yuanhui Hu and Qian Meng and Neng Chen and Mei Yuan and Jie Xia},
  title = {Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade},
  journal = {American Journal of Environmental and Resource Economics},
  volume = {10},
  number = {4},
  pages = {149-160},
  doi = {10.11648/j.ajere.20251004.14},
  url = {https://doi.org/10.11648/j.ajere.20251004.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajere.20251004.14},
  abstract = {This study provides a comprehensive, quantitative forecast of the dynamic impact of the European Union Deforestation Regulation (EUDR) on forest product exports from nine major Asia-Pacific economies to the EU market. To address the complexity of this policy shock, we develop a novel two-stage forecasting framework that integrates LASSO regression for high-dimensional variable selection with OLS modeling. This approach generates dynamic monthly projections from October 2025 to December 2027, simulating the policy’s effect by combining a historical proxy from the European Union Timber Regulation (EUTR) with a calibrated “intensity multiplier” based on the EUDR country-risk classification. Our projections reveal a distinct multi-phase adjustment process across the region: an immediate, sharp contraction in Q4 2025, followed by a period of significant volatility and supply chain disruption throughout 2026, and an uneven recovery in 2027. The findings underscore substantial heterogeneity in impacts driven by the EUDR risk-based framework. Standard-risk countries, such as Indonesia and Malaysia, are projected to face severe volatility and suppressed growth trajectories, with Malaysia’s exports showing particular vulnerability. In contrast, some smaller, low-risk nations like the Philippines may capitalize on a substitution effect, gaining market share as larger suppliers struggle with compliance. The study concludes that the EUDR acts as a powerful disruptive force, reshaping competitive dynamics and necessitating urgent policy responses, including enhanced traceability infrastructure and strategic market diversification, for Asia-Pacific exporters.},
 year = {2025}
}

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TY  - JOUR
T1  - Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade
AU  - Yuanhui Hu
AU  - Qian Meng
AU  - Neng Chen
AU  - Mei Yuan
AU  - Jie Xia
Y1  - 2025/12/09
PY  - 2025
N1  - https://doi.org/10.11648/j.ajere.20251004.14
DO  - 10.11648/j.ajere.20251004.14
T2  - American Journal of Environmental and Resource Economics
JF  - American Journal of Environmental and Resource Economics
JO  - American Journal of Environmental and Resource Economics
SP  - 149
EP  - 160
PB  - Science Publishing Group
SN  - 2578-787X
UR  - https://doi.org/10.11648/j.ajere.20251004.14
AB  - This study provides a comprehensive, quantitative forecast of the dynamic impact of the European Union Deforestation Regulation (EUDR) on forest product exports from nine major Asia-Pacific economies to the EU market. To address the complexity of this policy shock, we develop a novel two-stage forecasting framework that integrates LASSO regression for high-dimensional variable selection with OLS modeling. This approach generates dynamic monthly projections from October 2025 to December 2027, simulating the policy’s effect by combining a historical proxy from the European Union Timber Regulation (EUTR) with a calibrated “intensity multiplier” based on the EUDR country-risk classification. Our projections reveal a distinct multi-phase adjustment process across the region: an immediate, sharp contraction in Q4 2025, followed by a period of significant volatility and supply chain disruption throughout 2026, and an uneven recovery in 2027. The findings underscore substantial heterogeneity in impacts driven by the EUDR risk-based framework. Standard-risk countries, such as Indonesia and Malaysia, are projected to face severe volatility and suppressed growth trajectories, with Malaysia’s exports showing particular vulnerability. In contrast, some smaller, low-risk nations like the Philippines may capitalize on a substitution effect, gaining market share as larger suppliers struggle with compliance. The study concludes that the EUDR acts as a powerful disruptive force, reshaping competitive dynamics and necessitating urgent policy responses, including enhanced traceability infrastructure and strategic market diversification, for Asia-Pacific exporters.
VL  - 10
IS  - 4
ER  -

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Author Information

Yuanhui Hu

The Coordination Center for the Forest Networks in the Asia-Pacific, National Forestry and Grassland Administration of China, Beijing, China

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Qian Meng

Research Institute of Forestry Policy and Information, Chinese Academy of Forestry, Beijing, China

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http://orcid.org/0009-0007-4697-5080
Neng Chen

Global Green Supply Chain of Forest Products (Macao) Federation, Macao, China

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Mei Yuan

The Coordination Center for the Forest Networks in the Asia-Pacific, National Forestry and Grassland Administration of China, Beijing, China

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Jie Xia

School of Economics, Central University of Finance and Economics, Beijing, China

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http://orcid.org/0009-0007-5185-2480

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APA Style

Hu, Y., Meng, Q., Chen, N., Yuan, M., Xia, J. (2025). Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade. American Journal of Environmental and Resource Economics, 10(4), 149-160. https://doi.org/10.11648/j.ajere.20251004.14

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ACS Style

Hu, Y.; Meng, Q.; Chen, N.; Yuan, M.; Xia, J. Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade. Am. J. Environ. Resour. Econ. 2025, 10(4), 149-160. doi: 10.11648/j.ajere.20251004.14

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AMA Style

Hu Y, Meng Q, Chen N, Yuan M, Xia J. Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade. Am J Environ Resour Econ. 2025;10(4):149-160. doi: 10.11648/j.ajere.20251004.14

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@article{10.11648/j.ajere.20251004.14,
  author = {Yuanhui Hu and Qian Meng and Neng Chen and Mei Yuan and Jie Xia},
  title = {Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade},
  journal = {American Journal of Environmental and Resource Economics},
  volume = {10},
  number = {4},
  pages = {149-160},
  doi = {10.11648/j.ajere.20251004.14},
  url = {https://doi.org/10.11648/j.ajere.20251004.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajere.20251004.14},
  abstract = {This study provides a comprehensive, quantitative forecast of the dynamic impact of the European Union Deforestation Regulation (EUDR) on forest product exports from nine major Asia-Pacific economies to the EU market. To address the complexity of this policy shock, we develop a novel two-stage forecasting framework that integrates LASSO regression for high-dimensional variable selection with OLS modeling. This approach generates dynamic monthly projections from October 2025 to December 2027, simulating the policy’s effect by combining a historical proxy from the European Union Timber Regulation (EUTR) with a calibrated “intensity multiplier” based on the EUDR country-risk classification. Our projections reveal a distinct multi-phase adjustment process across the region: an immediate, sharp contraction in Q4 2025, followed by a period of significant volatility and supply chain disruption throughout 2026, and an uneven recovery in 2027. The findings underscore substantial heterogeneity in impacts driven by the EUDR risk-based framework. Standard-risk countries, such as Indonesia and Malaysia, are projected to face severe volatility and suppressed growth trajectories, with Malaysia’s exports showing particular vulnerability. In contrast, some smaller, low-risk nations like the Philippines may capitalize on a substitution effect, gaining market share as larger suppliers struggle with compliance. The study concludes that the EUDR acts as a powerful disruptive force, reshaping competitive dynamics and necessitating urgent policy responses, including enhanced traceability infrastructure and strategic market diversification, for Asia-Pacific exporters.},
 year = {2025}
}

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TY  - JOUR
T1  - Forecasting the Impact of the EU Deforestation Regulation (EUDR) on Asia-Pacific Forest Product Trade
AU  - Yuanhui Hu
AU  - Qian Meng
AU  - Neng Chen
AU  - Mei Yuan
AU  - Jie Xia
Y1  - 2025/12/09
PY  - 2025
N1  - https://doi.org/10.11648/j.ajere.20251004.14
DO  - 10.11648/j.ajere.20251004.14
T2  - American Journal of Environmental and Resource Economics
JF  - American Journal of Environmental and Resource Economics
JO  - American Journal of Environmental and Resource Economics
SP  - 149
EP  - 160
PB  - Science Publishing Group
SN  - 2578-787X
UR  - https://doi.org/10.11648/j.ajere.20251004.14
AB  - This study provides a comprehensive, quantitative forecast of the dynamic impact of the European Union Deforestation Regulation (EUDR) on forest product exports from nine major Asia-Pacific economies to the EU market. To address the complexity of this policy shock, we develop a novel two-stage forecasting framework that integrates LASSO regression for high-dimensional variable selection with OLS modeling. This approach generates dynamic monthly projections from October 2025 to December 2027, simulating the policy’s effect by combining a historical proxy from the European Union Timber Regulation (EUTR) with a calibrated “intensity multiplier” based on the EUDR country-risk classification. Our projections reveal a distinct multi-phase adjustment process across the region: an immediate, sharp contraction in Q4 2025, followed by a period of significant volatility and supply chain disruption throughout 2026, and an uneven recovery in 2027. The findings underscore substantial heterogeneity in impacts driven by the EUDR risk-based framework. Standard-risk countries, such as Indonesia and Malaysia, are projected to face severe volatility and suppressed growth trajectories, with Malaysia’s exports showing particular vulnerability. In contrast, some smaller, low-risk nations like the Philippines may capitalize on a substitution effect, gaining market share as larger suppliers struggle with compliance. The study concludes that the EUDR acts as a powerful disruptive force, reshaping competitive dynamics and necessitating urgent policy responses, including enhanced traceability infrastructure and strategic market diversification, for Asia-Pacific exporters.
VL  - 10
IS  - 4
ER  -

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