Key takeaways
New EU law tackles deforestation risks
Businesses must show products don’t harm forests.
Risk ratings help guide what’s required
Countries will be ranked to shape company checks.
EU offers support to ease compliance
Clearer guidance aims to help businesses adapt.
EU Deforestation Regulation
Latest developments and concerns
The EU Deforestation Regulation (EUDR) entered into force on 29 June 2023 and was originally intended to be implemented on 30 December 2024. We have discussed the main objectives of, and obligations under, the EUDR in this article.
However, due to concerns that affected companies and other stakeholders did not have sufficient time to prepare for compliance with the EUDR, implementation was delayed by a year. In October 2024, the EU Commission published a lengthy Guidance document regarding the EUDR’s requirements.
As a result, on 30 December 2025, the Rules will begin to apply to medium and large-sized operators and traders. On 30 June 2026, they will extend to micro and small enterprises.
Developments
Most recently, on 15 April 2025, the EU Commission published an updated Guidance, together with updated FAQs (fourth version). It also published a draft delegated Regulation that was open for public consultation until 13 May 2025.
The EU Commission subsequently adopted an Implementing Regulation under the EUDR, which was published on 20 May 2025. The Implementing Regulation classifies countries according to their risk of deforestation when producing the seven commodities covered by the EUDR (cattle, cocoa, coffee, palm oil, rubber, soya and wood).
The Annex to the Implementing Regulation sets out the risk status of countries. This benchmarking system is intended to inform companies as to what due diligence they must conduct, depending on the country from which they are importing products, whether directly or indirectly, or trading with generally. The Staff Working Document sets out the methodology used for the benchmarking system.
However, only four countries are designated high risk (Myanmar, Russia, North Korea and Belarus). The explanation given in the Implementing Regulation for the classification of most countries as low risk is that it gives the opportunity “to focus collective efforts and resources to protect forests in those geographic areas where deforestation challenges are more acute, creating achievable targets for countries that need improvement and reducing costs for operators.”
Updated Guidance and FAQs
The updated documents are a result of feedback from member states. The updated Guidance and FAQs aim to simplify and clarify measures and procedures under the EUDR. The Commission seeks to make it easier for companies, EU member state authorities and third-party countries to understand what must be done in order to demonstrate that products are deforestation-free for the purposes of the EUDR.
The EU Commission expects that this simplification and clarification will help to achieve harmonised application and enforcement of the EUDR throughout the EU. It also foresees that they will result in a 30% reduction in administrative costs and burdens for companies.
Some of the simplified measures include:
Non-SME companies may now reuse due diligence statements (DDS) when relevant products previously on the EU market are reimported. This means less information needs to be processed through the system.
Companies will be permitted to submit DDS annually, instead of having to submit them for every shipment or batch placed on the EU. This is likely to reduce the number of DDS required. A DDS can cover multiple physical batches/shipments so long as due diligence was undertaken on all the relevant products, and it does not cover shipments/batches dated more than one year before the time the DDS was submitted.
An authorised representative can submit DDS on behalf of members of company groups, using a single account if it so wishes. However, the updated Guidance makes it clear that the due diligence obligations apply to individual companies, not groups. Therefore, separate DDS have to be submitted for each entity. Clarification of what constitutes an authorised representative is awaited.
There is clarification on how to ascertain that due diligence has been carried out. The result is that non-SMEs downstream in the chain will have simplified due diligence and reporting obligations. These companies will be able to collect reference numbers from their suppliers and use those reference numbers to complete their own DDS.
The first report from non-SME operators will have to be submitted after 30 December 2026, i.e. one year after the Rules come into effect for them.
EU Omnibus Simplification Package
In July 2025, a coalition of 17 European organisations representing the agriculture, forestry, livestock, trade and processing sectors issued a joint statement requesting further simplification of the EUDR and stressing that more targeted, risk-based and practical implementation is required.
These industry groups maintain that the EUDR’s current framework is impractical and risks diverting commodity flows. They argue that as the Guidance is not legally binding, it may be interpreted differently across Member States. They have, therefore, called for a full review of the EUDR and appropriate legislative amendments.
Simplification of the EUDR has also been called for by 18 EU agriculture ministers from two-thirds of EU countries, who believe that the EUDR does not acknowledge that many low-risk Member States have their own forest protection laws and present negligible risk of deforestation. They argue that instead of targeting deforestation where the risk is highest, the EUDR imposes disproportionate bureaucratic obligations on low-risk countries, where deforestation is demonstrably insignificant.
On 9 July 2025, the European Parliament approved a motion asking the Commission to repeal the Implementing Regulation due to alleged shortcomings in the methodology used to carry out the country benchmarking. While the EP vote is non-binding, it puts pressure on the Commission to revise the EUDR and add a “no risk” (or negligible risk) category. Such an amendment if implemented could pose a risk, for example, that an ingredient or product associated with illegal deforestation could more easily enter the EU via a “no risk” country.
As of July 2025, it is anticipated that the EUDR will form part of the latest EU Omnibus Simplification Package, an initiative that is expected to cover several environmental regulations established under the EU’s Green Deal. The EU will take the opportunity to review existing legislation, update it and, where relevant, adapt it to new developments. The next Simplification Package is expected to be published in the autumn of 2025.
Comment
It is worth noting some related EU ESG developments.
In April 2025, the European Parliament agreed with the European Council to postpone the application of social and environmental reporting and due diligence measures under the Corporate Sustainability Reporting Directive (CSRD) by two years, as well as narrowing the CSRD scope for non-listed companies. Large companies/groups now have to publish their sustainability statements for financial years starting on or after 1 January 2027.
The requirements under the Corporate Sustainability Due Diligence Directive (CSDD) have been postponed by one year to 26 July 2027. Therefore, the relevant obligations will apply to European companies as of 26 July 2028.
