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The EU Deforestation Regulation (EUDR) aims to ensure that certain goods placed on the EU market will no longer contribute to deforestation and forest degradation in the EU and elsewhere in the world.
In December 2024, the European Union granted a 12-month phasing-in period, making the law applicable on 30 December 2025 for large and medium companies and 30 June 2026 for micro and small enterprises.
It is now planning more changes as well as a further grace period of six months for implementation.
Key measures
The Commission wants to reduce obligations for:
- Operators and traders that commercialise the relevant EUDR products once they have been placed on the EU market. These can be, for example, retailers or large EU manufacturing companies. These companies are in the downstream part of the relevant value chains. The upstream operator will continue to exercise due diligence.
- Micro and small primary operators from low-risk countries worldwide who sell their goods directly on the European market. These cover close to 100% of farmers and foresters in the EU.
There have been concerns about the EU's IT system's ability to cope, and so, to allow for it to be used more efficiently, the Commission proposes that downstream operators and traders should no longer be obliged to submit due diligence statements. This means that the reporting obligations and the responsibility would be focused on the operators placing the products on the market first. For example, cocoa beans would need only one due diligence statement to be submitted by the importer placing them on the EU market, but downstream manufacturers of chocolate products will not be required to submit a new due diligence statement in the IT system.
Micro and small primary operators will still be required to submit a one-off declaration in the EUDR IT system, but will not be required to regularly submit due diligence statements.
Transitional period for companies to strengthen the IT system
The Commission is also proposing transitional periods so that it can make sure the IT system is ready.
This means that the EUDR will enter into application on 30 December 2026 for micro- and small enterprises. For large and medium companies, the date remains 30 December 2025, but to ensure a gradual phase-in of the rules, there will be a grace period of six months for checks and enforcement.
The new dates for the EUDR taking effect as well as the simplification of obligations aim to ensure that the IT system can sustain the level of expected loads.
The Commission is also working on contingency plans, so that economic operators can comply with their obligations if the revised proposal is not adopted in time by the co-legislators, in which case the EUDR will enter into application on 30 December 2025. It's not immediately clear what the contingency plans are.
Next steps
The European Parliament and the Council will now discuss the Commission's proposal. They will need to formally adopt the amended legislation before it can come into effect. It's not a given that they will accept the changes, as the European Parliament has rejected the negotiating mandate proposed by the Legal Affairs Committee on changes to the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive.
We wrote a few weeks ago that it was likely that there would be more delays and changes to the EUDR. Businesses will be relieved that the compliance challenges posed by the legislation are likely to be reduced, but environmental campaigners will be accusing the EU of rowing back on its green agenda.
As we wait for the new rules to come into force, please contact the team if you need any help.
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