Update on the EU Deforestation-free Regulation

In a press release published on 2 October 2024, the European Commission proposed a 12-month delay to the application deadline for the EU Deforestation-free Regulation (EUDR). Alongside this proposal, the Commission also published additional guidance and updated its EUDR webpages to support companies and authorities preparing for the new regulatory requirements. Since the document is currently just a proposal, it is important to stress that it remains uncertain whether the suggested changes will eventually be implemented.

Application delay

If adopted, the Commission’s proposal to amend the EUDR application date would result in the Regulation to apply on 30 December 2025 for large companies and 30 June 2026 for micro- and small enterprises (subject to approval by the European Parliament and the Council).

The Commission only proposed changes to the date of application. The regulatory requirements are not set to change and internal work on the Regulation will continue. The adapted timeline would therefore be:

November 2024 : Registrations open for the Information System (to submit Due Diligence Statements).

2 December 2024 : Launch of the Information System (dedicated platform for companies to submit due diligence statements).

30 June 2025 : Publication of a report reviewing the regulation and assessing the possible expansion of the scope of the EUDR to other commodities and ecosystems, and potentially creating direct compliance obligations for financial institutions

Finalisation of the country benchmarking system that determines which countries are low-, standard- and high-risk.

30 December 2025 : Application of the EUDR obligations for large and medium companies.

June 2026 : Application of the EUDR obligations for small and micro-enterprises.

Guidance

The additional guidance is divided into 11 chapters covering legality requirements, application timeframe, agricultural use, and clarifications on the product scope. The guidance has been supplemented by more than 40 new questions in the latest FAQs and a dedicated webpage specifically detailing obligations for SMEs.

The documents provide the following clarifications:  

• Further information on key definitions, such as ‘placing on the market’ and ‘in the course of commercial activity’, that govern whether a product is subject to the rules. For example, relevant products used in a company’s own business and relevant free samples, pro-bono activities and donations are subject to the due diligence (DD) requirements and must have a due diligence statement (DDS). Scenarios explaining the obligations of operators and traders are presented in the Annex of the guidance.
• Clarification of the requirements for non-EU based operators placing products produced outside of the EU. In this case, the non-EU operator must complete the DD and submit the DDS for the products to enter the EU. However, the first EU based entity to place these products on the market will also be considered an operator and subject to the same requirements (although they can rely on the DD previously conducted). In this case, the requirement aims to ensure that there is always one responsible actor established in the EU.
• Additional guidance on checking upstream DD. Companies can ‘ascertain’ that DD was properly carried out by checking that the upstream operator has a compliant DD system in place, rather than systematically check every DDS.  

Further updates

Country benchmarking

The Commission also published the principles for its methodology to determine whether countries are low-, standard- or high-risk. The benchmarking will support operators’ risk assessment under their DD obligations and enable competent authorities to monitor and enforce compliance. The Commission stated that “a large majority of countries worldwide will be classified as low risk”, meaning that commodities originating in those countries can undertake a simplified DD process. Companies will need to wait until June 2025 when the Commission publishes the risk assignment to understand the effect on the extent of their DD.

Information System

The Commission completed the Information System that companies will use to submit their DDS. Companies can start registering early November 2024. The platform will fully launch in December 2024 to enable companies to submit DDS before the application deadline in 2025.

Strategic framework for international cooperation engagement

Due to the political sensitivity of the classification of non-EU countries into risk categories and concerns surrounding the ramifications of the EUDR on trade, the Commission launched a strategic framework for international cooperation on the EU Deforestation Regulation. It focuses on five priority areas (including support for smallholders) and eight key principles (such as a human rights-centred approach). The framework aims to promote a just transition to deforestation-free supply chains through dialogue, financing, and partnerships.