Commission proposes one-year delay to the implementation of the EU Deforestation Regulation
Published on 11th Oct 2024
Following numerous calls for postponement, a 12-month delay to implementation has been proposed
The European Commission put forward a proposal on 2 October to delay the implementation of the EU Deforestation Regulation to (EUDR) by 12 months. The EUDR bans the placing or making available on the EU market or the export of relevant products from the EU market, unless they are deforestation-free, have been produced in accordance with the relevant legislation of the country of production and are covered by a due diligence statement.
This requires companies to carry out extensive supply-chain due diligence before a product is placed on the market in the EU or exported from the EU. The regulation covers seven commodities: cattle, cocoa, coffee, palm oil, rubber, soya and wood. Many products derived from these commodities (such as leather and chocolate) are also included.
Over the past few months, pressure has mounted from industry, Member States and other countries, including the US, over the lack of clarity regarding the regulation's practical implementation. This has led to concerns that many are not prepared for the new rules, prompting the Commission to take action.
Extra 12 months
The proposal would mean that the EUDR applies from 30 December 2025 for large companies and 30 June 2026 for micro- and small enterprises. The intention is that the extra 12 months can serve as a phasing-in period to ensure proper and effective implementation. The Commission has invited the European Parliament and Council to adopt this proposal by the end of this year.
New guidance and FAQs
The proposal is accompanied by new guidance which covers 11 chapters on various topics, including definitions of "placing on the market", "making available on the market" and "export", products in scope, information requirements for composite products, and the role of certifications and third-party verification scheme's.
An updated frequently asked questions document has also been published, answering an additional 40 questions to the previous edition. New questions include how to declare the place of production of mixed goods, who is liable for breach of the regulation, and whether a customs declaration is sufficient documentation for due diligence.
Risk classification to countries
The proposal confirms that the Commission is looking to speed up the classification process of countries to "low", "standard" and "high" risk. It is expected that a large majority of countries worldwide will be classified as "low risk".
IT ready for business
The Commission confirms that the IT system used for submitting due-diligence statements will be available from November and fully operational from December 2024. This will allow EUDR-affected businesses to start registering and submitting due-diligence statements before the law takes effect in December 2025.
Osborne Clarke comment
The Commission's announcement of a proposal to delay the implementation of the EUDR is not surprising considering the recent calls from industry and Member States for further clarification on the implementation of the regulation.
If the proposal is adopted, the next 12 months will be critical for businesses to continue preparing for compliance with the EUDR. This period will allow for trial runs of the due-diligence statement submission process, ensuring that companies are fully ready when the regulation comes into force. It also allows more time to create an effective due-diligence system. The latest guidance on the EUDR will also be well received by businesses who are struggling to navigate the complexity of the regulation and its impact on them.
