In December 2024, representatives from the European Commission, Council of the EU and Parliament agreed a compromise that will delay the application of the Deforestation Regulation by 12 months.
The EU Deforestation Regulation ("EUDR") requires seven commodities and certain products derived from those commodities to be "deforestation-free" if they are placed or made available on the EU market or exported from it. Those companies or traders wishing to market the in-scope products in the EU, or export them from the EU, are required to complete extensive due diligence on their supply chains or face penalties.
For a detailed explanation of the EUDR and the obligations it puts on businesses trading in cattle, cocoa, coffee, oil palm, rubber, soya and wood, or certain derivative products, please see our client alert available here.
The delays
Two delays were agreed as a part of the compromise unveiled on 3 December 2024.1 The first delay will postpone to application of the rules requiring covered commodities and products marketed in (or exported from) the EU be 'deforestation-free' and shown to have followed certain due diligence obligations by 12 months. Large companies must follow these new rules by 30 December 2025 and with micro-undertakings or small undertakings having until 30 June 2026 to come into compliance.2
The Commission has also been granted a shorter delay to develop and assign risk classifications. A 6-month delay until 30 June 2025,3 has been agreed to ensure that the Commission is able to classify countries or regions into the designates risk categories of low-, standard-, or high-risk defined in the EUDR. These classifications will be important to traders as those engaging in trade of the covered commodities from low-risk areas will be allowed to use a simplified due diligence procedure.
The delay was approved by the Parliament by a plenary vote on 17 December 2024.4 The Council of the EU adopted the delay on 18 December 2024 finalising its legislative procedure.5 It will now be published in the Official Journal and enter into force before the end of the year.
A new commitment to review obligations
Amid a shortened timeline to complete the legislative procedure for the delay, the Parliament focused on also including a commitment from the Commission to review the measures for simplifications and reduction of administrative burden by 2028.6
Launch of the Deforestation Information System
A key feature of implementing the EUDR is the Information System outlined in the original regulation. On 6 December 2024, the Commission published in the Official Journal the rules for the functioning of the system.7 Once operational the Information System will be used by the operators and traders to submit and manage the Due Diligence Statements and the verifications necessary for compliance with the EUDR. The Commission has launched a training system to aid those who will need to use the tool familiarize their teams with the system and its technical requirements. It is available on the Commission's 'Green Business' website, found here.
Ruth Benbow (Knowledge Manager, London) and Emma Pessotto (Legal Trainee, Brussels) contributed to the development of this publication.
1 Council of the EU, "EU deforestation law: Council and Parliament agree on its targeted amendment" 3 December 2024, available here.
2 Amendment 3, Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2023/1115 as regards provisions relating to the date of application ("Compromise Agreement"), available here.
3 Amendment 1, Compromise Agreement.
4 European Parliament, "Deforestation law: Parliament gives companies extra year to comply" 17 December 2024, available here.
5 Council of the EU, "EU deforestation law: Council formally adopts its one-year postponement", 18 December 2024, available here.
6 European Parliament, "Deforestation law: agreement with Council gives companies extra year to comply" 3 December 2024, available here.
7 Commission Implementing Regulation (EU) 2024/3084 of 4 December 2024 on the functioning of the information system pursuant to Regulation (EU) 2023/1115 of the European Parliament and of the Council on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation, available here.
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