Delay in application of the EU Deforestation Regulation (EUDR) confirmed

What is the EUDR?

The EUDR (Regulation (EU) 2023/1115) was conceived as part of the European Commission's strategy under the Green Deal to protect global biodiversity and prevent deforestation and forest degradation.

Published in June 2023, the EUDR introduced rules to prevent the placing on the market in the EU or the export from the EU of products issued from a number of critical commodities unless it can be demonstrated that their production has not caused deforestation or forest degradation.

As a Regulation the EUDR will be directly applicable to companies that are in scope without the need of transposition into the national laws of the Member States.

Scope

Products covered by the EUDR are those containing, fed with or made from:

• cattle
• cocoa
• coffee
• palm oil
• rubber
• soy
• wood

Persons concerned by the EUDR are:

• "Operators": any persons (natural or legal) placing relevant commodities or products on the EU market or exporting them in the course of a commercial activity
• "Traders": any persons (natural or legal) in the supply chain, other than the operator, making relevant commodities or products available on the EU market in the course of a commercial activity

The new rules

The EUDR requires in-scope operators and traders to carry out due diligence on their entire supply chain, up to the point of origin of the commodity concerned, in order to ensure that their products are:

1. deforestation-free;
2. produced in accordance with the relevant legislation of the country of production, and
3. covered by a due diligence statement.

The obligations for operators and traders include:

• collection of information, data and documents across the supply chain to prove compliance (including collection of geolocation data to prove the exact location of origin of the relevant commodity)
• submission of the information in a corresponding due diligence statement to the competent Member State authorities
• passing information on due diligence exercised to operators and traders further down the supply chain
• assessment of risk that products are non-compliant, and implementation of risk mitigation measures where risks have been identified
• establishment and maintenance of due diligence systems, reporting and record keeping
• not placing products on the market or exporting them if the due diligence reveals that they are non-compliant or at "non-negligible risk" of non-compliance, or if the due diligence was not performed

Non-compliance

EU Member State competent authorities are responsible for setting penalties and for enforcement of the EUDR.

If found to be non-compliant with the EUDR's requirements, operators and traders will be obliged to take corrective measures. Failure to comply will also incur penalties including fines, confiscation of non-compliant products and prohibition of non-compliant products from the market or export.

Postponement of implementation

The EUDR had been due to enter into application on 30 December 2024 for large and medium-sized companies and 30 June 2025 for small companies and micro-enterprises, but concerns were expressed by both EU and non-EU countries and industry that it would not be possible to prepare and implement the necessary due diligence systems and procedures by these deadlines. In response to this pushback, the Commission proposed a 12-month delay to provide additional time for compliance, including the possibility to submit due diligence statements to the newly-operational EUDR Registry of Due Diligence Statements (the "Information System") in advance of the revised deadlines.

The introduction of the 12-month delay has provided in-scope companies with some breathing space, but they will still need to ensure that the requisite due diligence systems are integrated into their operations before the end of 2025.

New dates of entry into application:

• 30 December 2025 for large and medium-sized companies
• 30 June 2026 for small companies and micro-enterprises

Our Corporate and ESG team is ready to address all questions about the EUDR, its impact to your business and how to ensure compliance with the incoming rules. Key contact: Lars Raedschelders