The EU Deforestation Regulation: deferred application, updated guidance and new FAQs

On 2 October 2024, the European Commission published a proposal for a new legislative act which would defer the application of the recently adopted EU Deforestation Regulation (EUDR) by 12 months, citing the concerns raised by international partners about EUDR and the need to allow them and affected entities additional time to prepare.

Separately, the Commission published updated Guidance on the interpretation of some of the key provisions of the EUDR and an updated, lengthy, Frequently Asked Questions document.

Background

The EUDR, which is an EU statute designed to ensure that no products or commodities linked to deforestation or forest degradation in third countries enter or are sold on the EU market, was originally adopted on 31 May 2023 and it entered into force on 29 June 2023. Most of its key provisions, including compliance deadlines had deferred application, in particular: 30 December 2024 for larger enterprises, and 30 December 2025 for small and micro-undertakings, to conduct due diligence into their supply chains and produce a due diligence statement, among various other obligations, demonstrating that the in-scope products or commodities they import or sell in the EU are not linked to deforestation.

Deferral of the application date

Over the last few months, soundings from both industry, and state actors abroad, have made it clear that a deferral of the application date of the new rules is seen as essential to allow more time for affected parties to prepare, properly understand their obligations and to avoid supply chain disruption. Seemingly in response to these calls, the Commission’s new proposal would amend the EUDR giving affected entities an extra 12 months to comply (30 December 2025 for large enterprises, or 30 December 2026 for small and micro-undertakings). The repeal of the EU’s existing Timber Regulation 995/2010 is also being deferred until 30 December 2025 (originally scheduled a year earlier), to ensure no gap in regulation in the interim period.

New guidance and FAQ

The Commission has also published new, more detailed Guidance notes and updated FAQs on the EUDR. The Guidance covers eleven different chapters dedicated to providing additional information and clarification on issues such as the definitions of key concepts under EUDR (e.g., ‘placing on the market’, ‘making available on the market’, ‘operator’ and ‘negligible risk’); the products that are in scope; the requirement for them to have been “produced in accordance with the relevant legislation in the country of product”; the role of certifications and third-party verifications in risk assessment and mitigation and other areas.

The updated FAQs answers 40 additional questions to the existing list, spanning all aspects of the EUDR, including a new section on the penalties applicable under EUDR, plus on the Information System to be established through an implementing act yet to be published by the Commission, which must be used by obligated operators and traders for submission of their due diligence statements, among other matters.

Next steps

The proposal needs to be adopted by the European Parliament and Council - it is widely expected that it will be - and the Commission has invited them to do this by the end of 2024. Considering that this is potentially after the first compliance deadline this may cause some concern and the Commission is advising those affected not to delay preparation and has confirmed that the Information System will be accepting registration from as early as November 2024.

Comment

Considering the significance of the new rules under EUDR and likely impact on supply chains worldwide, as well as the complexity of the rules and the need for additional clarity on quite a few key areas, the publication of additional guidance, coupled with a deadline extension, would be welcome by most affected actors. Even with the extension, the time left to prepare is short.