On 3 December 2024, provisional agreement was reached on the proposal to delay the application of the European Union’s Deforestation Regulation (EUDR) by 12 months. According to the provisional agreement, the targeted amendment will not affect the substance of the existing legislation as it was originally agreed. The EUDR only allows in-scope products and commodities that are ‘deforestation-free’ to be placed or made available on the EU market and/or exported from the EU. This includes certain products made from cattle, wood, cocoa, soy, palm oil, coffee and rubber.

The proposed delay still needs to be endorsed and formally adopted by both the European Parliament and the Member States in the Council to pass into law. This is fully expected to pass, meaning that companies will have until 30 December 2025 to comply with the EUDR. In the unlikely event that the delay is not approved, the EUDR could still come into force by default on 30 December 2024.

The aim behind the delay is to give businesses time to fully implement their EUDR due diligence obligations, and to ensure that the in-scope commodities and products are ‘deforestation-free’ and can be accompanied by the required due diligence statement before they are placed or made available on the EU market or exported from the EU. Given the huge lift involved for EUDR compliance, this is still not a lot of time for companies with in-scope products.

The EUDR rollercoaster: Getting up to speed

The EUDR entered into force 29 June 2023 and was supposed to apply from 30 December 2024 (with a longer transition period for certain small and medium-sized enterprises).

However, significant concerns were raised by industry, EU Member States and non-EU countries – including the US – that they would not be able to comply on time. At the time, certain key technical aspects of the EUDR, e.g., the information system through which businesses would need to register their due diligence statements, were not yet up and running. In response, the European Commission presented a proposal on 2 October 2024 to delay the application date of the EUDR by 12 months. The Council agreed to the one-year delay on 22 October 2024.

However, when the file went to the new European Parliament for approval, politicking put the delay in jeopardy. The EPP (European People’s Party) group in Parliament pushed for further changes – including a two-year delay, the removal of traders from the scope of the EUDR and the creation of a new risk category for countries posing ‘no risk’ of deforestation. While only the additional amendment creating a new ‘no risk’ category was adopted by Parliament alongside agreement to the 12-month delay, this change meant that the delay was not approved, and the European Commission’s proposal had to go back to trilogue negotiations.

While the first round of negotiations failed, following provisional agreement on 3 December, Parliament dropped the call for additional amendments to the EUDR, and the one-year delay – which all three EU institutions agreed to – is now likely to become law.

The provisional agreement will now need to be voted on again by the Council and Parliament, and once formally adopted, it will need to be published in the Official Journal of the European Union. Following publication, the postponement will enter into force three days later – an expedited process that is faster than usual. As a regulation, the EUDR is directly applicable throughout the EU without the need for Member States to adopt national implementing legislation.

EUDR refresher

The EUDR applies to the raw commodities (cattle, cocoa, coffee, oil palm, rubber, soy and wood) and products that fall within the customs codes specifically listed in Annex I to the EUDR. 

It includes requirements that in-scope products and commodities may not be placed or made available on the EU market or exported from the EU unless they are ‘deforestation-free’, have been produced in accordance with the relevant legislation of the country of production and are covered by a due diligence statement. The due diligence statement must be filed before the product can be placed or made available on the EU market and must contain, among other things, information identifying the country of production and the geolocation of all plots of land where the relevant in-scope products were produced. The EUDR also contains record-keeping obligations and a requirement for companies to report publicly – including online – on their due diligence system and the steps they’ve taken to fulfil their EUDR due diligence obligations. Companies can satisfy their annual reporting obligation by including the information required by the EUDR in other reports they file publicly – e.g., a sustainability report under the Corporate Sustainability Reporting Directive (CSRD).

For more detail on the EUDR, see our earlier publication.

EUDR resources

While the European Commission has faced criticism for a lack of resources to support companies, some materials have already been published.

  • EUDR guidance and the latest version (October 2024) of the EUDR FAQs, covering details on the functionalities of the information system, updates on penalties, and clarifications on critical definitions, such as ‘forest degradation’, ‘operator’ in the scope of the law and ‘placing on the market’.
  • As of December 2023, the EU Observatory on deforestation and forest degradation has been available to businesses. The Observatory is a library of existing monitoring tools offering publicly available maps and datasets providing scientific evidence on global deforestation and forest degradation – e.g., near-real-time analysis of time series of satellite data. While the European Commission is clear that use of these maps will not automatically ensure that the conditions of the EUDR are complied with (companies will still be required to carry out due diligence), they are promoted as tools to help companies ensure compliance with the EUDR (e.g., to assess the deforestation risk).
  • If the proposed delay is adopted, companies can expect the list of countries or regions that present a low or high risk to be published by means of implementing acts no later than 30 June 2025 (delayed from 30 December 2024). The European Commission’s benchmarking framework (upon which the country-by-country risk assessment will be based) indicates that a large majority of countries worldwide are expected to be classified as ‘low risk’. Products originating from ‘low- risk’ regions will benefit from a simplified due diligence process which will not require an in-depth risk assessment or the adoption of risk mitigation measures.
  • The Deforestation Due Diligence Registry opened for the submission of due diligence statements on 4 December 2024. This is the online registry for making and submitting electronic due diligence statements that will ultimately be required to comply with the EUDR. These due diligence statements will need to show that a product is deforestation-free before it can be placed or made available on the EU market or exported from the EU.
  • The regulators who will ultimately be responsible for enforcing the EUDR can be found in the list of Designated Competent Authorities as updated from time to time.

Posted by Cooley

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