EU to Delay Implementation of Supply Chain Deforestation Law – Again

The European Commission is looking to further delay the implementation of the EU Deforestation Regulation (EUDR) – its new law aimed at ensuring that products imported to or exported from EU markets no longer contribute to deforestation and forest degradation globally – for a year, due to concerns that IT systems currently in place will not be sufficient to handle the data load created by the new regulation.

The proposal marks another setback for the implementation of the EUDR, following another 1 year delay agreed to by European Council and Parliament lawmakers last year, which would have seen the law come into effect for large companies at the end of this year, and for micro- and small enterprises in June 2026.

The EUDR was initially introduced by the EU Commission in November 2021, with proposals aimed at effectively banning deforestation-linked products on the EU market, and establishing strong compliance requirements for companies providing or utilizing key commodities and products such as palm oil, beef, timber, coffee, cocoa, rubber and soy, in addition to some of their derived products, such as leather, chocolate, tires, or furniture.

Under the new rules, companies that want to place relevant products on the EU market, or export them, will face mandatory due diligence rules, including a requirement to trace the products back to the plot of land where it was produced, to prove that the products were produced on land that was not subject to deforestation after 2020, and are compliant with all relevant applicable laws in force in the country of production.

Last year’s delay was made at the request of the Commission, which had noted that “several global partners have repeatedly expressed concerns about their state of preparedness,” and added that even within the EU, “the state of preparations amongst stakeholders in Europe is also uneven.” The regulation hit another potential roadblock earlier this year, with Parliament MEPs voting to reject the EUDR’s benchmarking system categorizing countries by their level of deforestation risk, with some lawmakers calling for the introduction of a “no risk” category to exempt some countries from the law’s requirements.

The new proposed delay was unveiled in a letter from EU Commissioner Jessika Roswall to MEP Antonio Decaro, Chair of Parliament’s ENVI Committee. In the letter, Roswall noted that the EUDR will require an IT system that would be required “to handle all the transactions for products covered by the EUDR and initiated by economic operators in the scope of the EUDR, both upstream and downstream, inside and outside the EU,” and that as the Commission has been working to deploy its IT system, its new projections have “led to a substantial upward reassessment of the projected load on the IT system.”

Roswall outlined concerns with implementing the EUDR with the systems currently in place, noting that it “will very likely lead to the system slowing down to unacceptable levels or even to repeated and long-lasting disruptions,” which, in addition to not meeting the EUDR’s objectives, would also “potentially affect trade flows in the areas covered by the legislation.”

While acknowledging that the EUDR “is a key initiative to combat global deforestation and ensure sustainable value chains,” Roswall said that the Commission is now considering delaying the regulation “for one year, in order to avoid uncertainty for authorities and operational difficulties for stakeholders in the EU and third countries, and to allow time to remedy the identified risks.”