Key takeaways
Alignment with EUDR
UK rules are expected to closely mirror key EUDR requirements.
Wider business impact
The proposed £1 million threshold captures a broader range of businesses.
Expanded commodity coverage
Requirements will apply beyond timber to several forest-risk commodities.
Introduction
In our earlier article, we noted that legislation relating to the UK’s Forest Risk Commodities Regulations had not yet been published and that there was no clear timetable to implementation. While the legislation has still not been finalised, the UK government provided greater certainty on 23 June 2026 by announcing its intended policy approach and confirming plans to introduce a broader deforestation due diligence regime across the UK. The government plans a consultation later in 2026 with legislation expected to be delivered in 2027.
Overview of UK regulatory framework on deforestation
The UK has had a mandatory due diligence framework for timber in place since 2013, initially with the EU Timber Regime (’the EUTR’), which was then converted to the UK Timber Regime (’the UKTR’) from 1 January 2021 following Brexit. As the government continues to work towards its objectives in meeting the commitment it made at COP 26 to stop and reverse forest loss and land degradation by 2030, it is now entering the next stage of policy development. To assist in meeting its objectives, it is planning to introduce new legislation using powers in the Environment Act 2021 (’the Act’) to work alongside the UKTR to further combat deforestation. Legislative changes to the Act are expected to be implemented in 2027 operating alongside the UKTR.
What will the new legislation apply to?
Under the UK’s intended legislation, the following commodities will be covered:
wood
cattle
cocoa
coffee
palm oil
rubber
soy
certain derived products like chocolate and furniture
Who will the new legislation apply to?
In our earlier article, we reported that the UK’s intended regulations were proposed to apply to businesses with a global turnover of more than £50 million. However, the latest announcement by the government indicates an intention to require UK businesses with an annual turnover of over £1 million, that use forest-risk commodities and wood products, to carry out due diligence to ensure these are produced in compliance with relevant local laws.
This far lower turnover threshold indicates the government’s intention that the legislation will apply very broadly.
Interaction with the EUDR
The government’s latest announcement demonstrates its aim that UK and EU regulations on deforestation are closely aligned.
Our earlier article on the EU Deforestation Regulation (’the EUDR’) provides further detail on the EU regime. Since then, the EUDR's implementation timetable has been revised and the UK has signalled an intention to develop a framework that is more closely aligned with key aspects of the EU approach.
By way of example, the latest list of commodities to be covered by the UK’s intended legislation mirror those covered by the EUDR. This reflects the broader government principles of protecting the UK internal market and supporting export led growth through consistency of standards applying in the UK and to all EU member states.
It is important to note that the EUDR will apply to UK businesses operating within the EU and those placing relevant products on the EU or Northern Ireland markets from 30 December 2026 for large and medium operators for all relevant products, and micro and small operators (fewer than 50 employees and an annual turnover not exceeding €10m) for wood products currently subject to the EUTR. For micro and small operators, the EUDR will apply from 30 June 2027 for all other relevant products.
What will the obligations be?
Businesses who use the products from the list above will need to ensure they establish a due diligence system, report on their activity and hold proof of this compliance by collecting geolocation data about the origin of the specific products.
As indicated above, the government’s aim is that the information UK businesses must hold will align with requirements to obtain due diligence statements when exporting to the EU or moving goods to Northern Ireland under the EUDR.
Contractual considerations
Businesses should start preparing in advance of the UK’s final legislation being announced. The consultation expected later in 2026 should provide further detail, but the direction of travel is already clear. UK businesses will need better visibility over supply chains, stronger supplier engagement and reliable evidence of product origin.
For commodities trading associations (e.g. GAFTA, FOSFA), it may be appropriate to consider whether their existing standard form contracts need to be updated to take the upcoming UK legislation on deforestation into account.
In addition, commodities traders entering into bespoke sale contracts are recommended to consider carefully whether and what express provisions they should incorporate to take into account compliance with the UK’s upcoming deforestation legislation.
Conclusion
While the UK's deforestation due diligence regime is not expected to come into force until 2027, the 23 June announcement has clarified the UK government's intended approach. Businesses dealing in forest-risk commodities should begin reviewing their supply chains, traceability processes and contractual arrangements to prepare for the new requirements. Given the anticipated alignment with the EUDR, organisations that are already preparing for EU compliance may be able to take advantage of existing systems, but early planning will be essential to manage regulatory risk and ensure compliance once the UK regime is implemented.
For any queries relating to forest-risk commodities or other commodities regulatory regimes, please contact our Commodities team to discuss how we can support you.
This article was co-authored by Trainee Solicitor, Griff Gough-Walters
