On 14 November, the European Parliament (the “Parliament”) approved a significant postponement in the application of the EU’s deforestation regulation (“EUDR”), in recognition of industry concerns about compliance readiness. As reported in our previous article on the subject, the EUDR aims to combat climate change and biodiversity loss by regulating the import of commodities linked to deforestation, including cattle, cocoa, coffee, palm oil, soy, timber, rubber, charcoal, and printed paper.
In response to widespread calls from EU member states, international partners and industry stakeholders citing challenges in meeting the stringent requirements, the initial compliance deadlines set for December 2024 have now been extended by one year. The Council of the European Union had previously agreed to this postponement, without proposing additional changes to the EUDR.
New timeline for compliance
The compliance date for large operators and distributors was pushed back to December 2025, while micro and small businesses will have until June 2026 to comply. This extension will ease the transition to a stricter regulatory framework without compromising the regulation’s underlying goal of reducing deforestation and promoting sustainable supply chain practices. The extension will also give companies enough time to make the necessary adjustments.
The postponed timeline aims to provide companies with sufficient time to align their operations with the EUDR’s stringent requirements. However, unresolved issues such as the delayed publication of the Commission’s guidance and the rollout of the Deforestation Due Diligence Statement Registry continue to weigh heavily on businesses.
Introduction of new Country Risk classification
In addition to the existing low, standard and high-risk groups, the amendment introduces a new classification for country risk assessment, adding a “no risk” category. This category applies to countries with stable or increasing forest cover, reducing the compliance burden for operators sourcing from these regions due to their low risk of deforestation. The European Commission is tasked with finalising this country benchmarking system by mid-2025, a step that is expected to increase clarity and promote fair application of the EUDR.
Delaying the EUDR reflects a pragmatic response by EU legislators to balance ambitious environmental goals with the practical constraints faced by businesses, particularly those relying on complex international supply chains. While it signals a recognition of the need to allow sufficient time to prepare for effective compliance, some experts are hesitant since it risks undermining the legal certainty and the credibility of the EU's leadership in global climate action, particularly at a critical time when COP29 has just taken place. It is suggested that this shift could potentially signal to the world that the EU is prioritising business interests over urgent environmental commitments.
Conclusion
Striking a delicate balance between ambitious environmental goals and business realities, the Parliament's decision to postpone compliance deadlines for the EUDR recognises the practical challenges facing industry in adapting to its stringent requirements. While this extension shows a pragmatic approach, it also raised concerns that it threatens to undermine the EU’s leading role in the global fight against climate action.
Further, it is questionable whether simply postponing the application date can actually solve the pressing compliance problem and the necessary preparation for the deforestation regulation, as many companies continue to face significant challenges, some of which are almost impossible to overcome. Similarly, the initial restriction of the scope to large operators and distributors should be viewed critically, as they often work with micro and small businesses that are indirectly affected by various EU regulations through the supply chain.
Professional cooperation between legislators and the private sector could be crucial to improving ESG legislation in the long term. Companies that prepared for the EU's deforestation regulation at an early stage have already been able to identify significant challenges in its practical implementation. The private sector contributes valuable industry-specific know-how and practical experience, while legislators create the necessary legal framework and ensure compliance. This dialogue enables the development of practical and effective standards that not only aim for compliance but also promote long-term sustainability and economic value. This results in more efficient legislation that better meets the needs of the economy, the environment and society.
For more information on the extension of the application timeline of the EUDR and its impact on your company or business, please contact your CMS partner or local CMS expert.
One-stop shop for EUDR compliance with CMS and LiveIO
The collaboration between CMS and LiveEO combines CMS's legal expertise with LiveEO's advanced satellite-based monitoring technology to simplify compliance with the EU Deforestation Regulation (EUDR) for businesses. Together, we offer a comprehensive solution that includes precise detection of deforestation events, a legal framework for due diligence, and efficient documentation management through the TradeAware platform. This partnership streamlines EUDR compliance, enabling companies to address legal, technical, and administrative requirements from a single source, ensuring sustainability and regulatory alignment
