EU Deforestation Law Update

EU Deforestation Regulation (EUDR) – Insights for Businesses and Stakeholders

The European Union’s Deforestation Regulation (EUDR) is a landmark piece of legislation aimed at preventing products linked to deforestation and forest degradation from entering the EU market. The regulation applies to key commodities including cocoa, coffee, palm oil, beef, leather, timber, rubber, and soy—products that have historically been associated with deforestation in tropical regions.

Under the regulation, these products must not originate from land that was deforested or degraded after December 31, 2020. The EUDR forms a central component of the EU’s European Green Deal, reflecting the EU’s commitment to combat climate change, preserve biodiversity, and ensure sustainable global supply chains.

Proposed Changes and Timeline

The European Commission has proposed several updates and simplifications to the EUDR framework to balance environmental goals with practical compliance for businesses.

1. Enforcement Dates

a. The general application date for the EUDR remains 30 December 2025.
b. Micro and small operators now have until 30 December 2026 to comply with the new requirements. (A six-month postponement for micro and small enterprises to 30 December 2026 (from 30 June 2026))

2. Simplified Regime for Small Businesses

a. Micro and small primary operators will no longer be required to submit full due diligence statements.
b. Instead, these operators can provide a one-time simplified declaration, reduce an administrative burden while still ensure compliance.

3. Changes for Traders and Downstream Operators

a. Traders and downstream operators do not need to submit due diligence statements or confirm that due diligence has been carried out.
b. However, they must still:

i. Register if they are non-SME (Small and Medium Enterprises)
ii. Maintain full traceability of products through the supply chain
iii. Share reference numbers or declaration identifiers along the supply chain
iv. Collect and retain supplier/buyer details and associated identifiers for five years

These changes aim to simplify compliance with smaller actors without compromising the traceability and accountability requirements for larger businesses.

Important: The proposal still requires approval from both the European Parliament and the Council before it can enter into force.

Voting and Decision Timeline

a. A plenary session in Strasbourg took place, but the proposal arrived too late to be discussed.
b. The next plenary session of the European Parliament in Brussels (12–13 November 2025) is likely when the proposal will be voted on.

Possible Scenarios

i. If the European Parliament accepts the proposal (with or without amendments), the Council must confirm it in a separate vote.
ii. If the Parliament rejects it, the EUDR enters into force unchanged.
iii. If the Council amends the proposal, a second Parliament vote will be required, potentially leading to further modifications—or, if negotiations fail, the EUDR enters into force unchanged.

Obligations for Businesses: While the proposed changes aim to simplify compliance, the outcome is still uncertain. Non-SME operators’ obligations remain unchanged, including collecting and forwarding due diligence reference numbers. Their compliance timeline also remains the same.
Clarity on potential amendments is expected no earlier than 17 November (potential Council meeting) and no later than the end of December 2025.

Requirements for Companies

Despite simplifications for smaller businesses, non-SME operators and larger actors are still required to:

i. Submit full Due Diligence Statements to demonstrate that products are deforestation-free and legally produced.
ii. Use the TRACES System, the EU’s online platform, for tracking and certifying compliance.
iii. Conduct Risk Assessments to classify countries of origin as low, standard, or high risk, determining specific compliance obligations.
iv. Maintain Supply Chain Traceability, ensuring transparency and accountability throughout all steps.
v. Businesses are encouraged to begin preparing their supply chains now, even before the final vote, to avoid last-minute compliance challenges and demonstrate sustainability of leadership.

Global Reactions

a. Environmental Groups have urged swift implementation, warning that delays could undermine global forest conservation efforts.
b. Industry Leaders have expressed frustration over the regulatory uncertainty, emphasizing that delays and unclear requirements make long-term planning difficult.
c. Exporting Countries, including Brazil and Malaysia, have raised concerns about the economic and trade impacts of the EUDR, particularly on commodities like palm oil, soy, and beef.

Future Action Plans

The EUDR represents a significant step in aligning trade with sustainability objectives. Its success will depend on:

i. Clear guidance for all types of companies, from micro-businesses to multinational corporations
ii. Effective enforcement mechanisms to ensure compliance
iii. International collaboration to support fair, sustainable, and legally compliant supply chains
Proactive Measures: Companies that act now can strengthen their supply chains and compliance strategies on their own terms, regardless of political outcomes.

Reference: EUDR