EU proposes second delay to anti-deforestation law as industry pressure mounts

The European Commission has proposed delaying the EU Deforestation Regulation for a second consecutive year, confirming that the bloc's flagship environmental supply-chain law will not take effect before the end of 2026 at the earliest. Environment commissioner Jessika Roswall told reporters on Tuesday that the executive had written to the Council of the EU and the European Parliament requesting a further 12-month extension, arguing that the IT infrastructure needed to process due-diligence statements from thousands of companies remains unready.

The regulation, adopted in 2023, requires operators and traders placing cocoa, coffee, cattle, palm oil, rubber, soya and wood on the EU market to prove the products were not produced on land deforested or degraded after 31 December 2020. Compliance demands geolocation coordinates for every plot of land in the supply chain, a requirement that has triggered warnings of administrative overload from industry groups and trading partners alike. The law was originally scheduled to apply from 30 December 2024. In October last year the Commission proposed a one-year postponement to 30 December 2025. That deadline is now set to slip again.

A regulation built on traceability

The EUDR is the most ambitious attempt yet by any major economy to sever the link between European consumption and global forest loss. Unlike voluntary certification schemes, it imposes a legal due-diligence obligation: companies must collect geographic coordinates, verify them against satellite data, and submit a due-diligence statement through a centralised information system before goods clear customs. Non-compliance carries fines of up to 4 percent of annual EU turnover. The scope covers both direct imports and derived products, leather, chocolate, tyres, furniture, meaning the regulation reaches deep into manufacturing and retail supply chains.

From the start, the technical challenge was immense. The Commission's own impact assessment acknowledged that millions of smallholders in producer countries would need support to generate the required geolocation data. The information system, known as the EUDR registry, must ingest, validate and risk-score due-diligence statements from an estimated 180,000 operators. Roswall's explanation on Tuesday centred on this infrastructure: "We still cannot believe that we can really get this without disruption for our businesses. We need the time to combat the risk with the load of information in the IT system."

Industry and trading partners push back

Complaints have come from multiple directions. European coffee roasters, timber traders and meat processors argue that tracing every batch to a specific plot is often impossible, particularly where supply chains involve thousands of small farms aggregated through intermediaries. The Confederation of European Paper Industries warned last year that the regulation could halt pulp imports from Latin America because land-tenure records are incomplete. In Germany, the association of medium-sized coffee roasters said the data requirements would force some firms to stop sourcing from entire regions.

Outside the EU, the reaction has been sharper. The United States, Brazil, Indonesia, Malaysia and a coalition of 17 other countries have formally objected, calling the rules protectionist and incompatible with World Trade Organization obligations. Indonesia, the world's largest palm-oil exporter, concluded a long-running trade negotiation with the EU on Monday, the same day the delay letters were sent. Roswall denied any connection: "The delay is not linked to the conclusion of the trade talks with Indonesia, nor to complaints from the US, Japan or Malaysia." Trade policy analysts in Brussels remain sceptical. The timing suggests the Commission wanted the Indonesia agreement sealed before announcing a further postponement that Jakarta has publicly demanded.

The competitiveness agenda takes precedence

The delay fits a pattern established since Ursula von der Leyen's second Commission took office in December 2024. The executive has rebranded its work programme around "competitiveness" and "simplification", launching an omnibus exercise to reduce reporting burdens across sustainability legislation. The Corporate Sustainability Due Diligence Directive, the Corporate Sustainability Reporting Directive and the Taxonomy Regulation have all been opened for revision. The EUDR is the most high-profile casualty so far.

A majority of member states backed a delay at the Environment Council in March, with several ministers arguing that the regulation's benchmarking system, which classifies countries as low, standard or high risk, was not operational. The centre-right European People's Party, the largest group in the European Parliament, has led the legislative push. Peter Liese, the EPP's environment spokesman, claimed victory on Tuesday: "Our efforts have finally been successful. If the deforestation regulation had entered into force unchanged on 1 January, it would have caused unsolvable problems for many small foresters, farmers, and small and medium-sized enterprises, such as medium-sized coffee roasters."

Environmental cost of the postponement

Green groups and Green MEPs reacted with fury. Anke Schulmeister-Oldenhove, forest policy manager at the WWF European Policy Office, called the proposal "an unacceptable and a massive embarrassment for President von der Leyen and her Commission. If this technical issue is real, this shows not only incompetence, but also a clear lack of political will to invest sufficiently in a timely implementation of the EUDR." Thomas Waitz, agriculture coordinator for the Greens/EFA group, went further: "The Commission is bowing to the wishes of the agricultural industry and sawmill lobby and their EPP henchmen. It is a dark day for global forest protection."

Their anger is grounded in fresh science. A study published in August in the journal Nature Climate Change estimated that deforestation in the tropics caused more than 500,000 heat-related deaths between 2003 and 2022, as forest loss removes the cooling effect of evapotranspiration. Another paper, published in Proceedings of the National Academy of Sciences, found that about 75 percent of the observed decline in Amazon rainfall since the 1970s is directly attributable to forest clearance. The EU's own consumption footprint, the deforestation embedded in its imports, accounts for roughly 16 percent of global tropical deforestation linked to international trade, according to a 2023 Commission assessment.

What the delay changes, and what it does not

The proposed extension does not amend the substance of the regulation. The product scope, the 2020 cut-off date, the due-diligence obligations and the penalty framework remain unchanged. What shifts is the date from which operators must comply. For large companies, the new deadline would be 30 December 2026; for micro and small enterprises, 30 June 2027. The Commission has also signalled it will use the extra time to discuss "simplification of different angles" with ministers, opening the door to targeted exemptions or lighter requirements for low-risk commodities and smallholders.

Whether the Parliament and Council accept the delay is not guaranteed. The co-legislators must approve the extension through a fast-track procedure. The EPP's dominance in Parliament makes rejection unlikely, but the Greens, Socialists and Liberals could combine to demand concessions, for instance, a binding commitment that no substantive weakening will follow. The Council, where a qualified majority is needed, may also extract guarantees on the benchmarking methodology. The legal service of the Council has previously warned that repeated delays could undermine the regulation's credibility in WTO disputes.

The benchmarking gap

A critical unresolved issue is the country benchmarking system. The EUDR requires the Commission to classify producer countries by deforestation risk by 30 June 2025. Low-risk countries would face simplified due diligence; high-risk ones, enhanced checks. That classification has not been published. Without it, every operator must apply the standard procedure, maximising the compliance burden the Commission now cites as justification for delay. Industry sources say the benchmarking exercise has stalled over methodological disputes, how to weight historical deforestation rates against current governance, and whether to incorporate human-rights indicators. The delay buys time to finish it, but also postpones the differentiation that would ease the load for the majority of trade flows originating in low-risk jurisdictions.

The Commission's letters to the Council of the EU and the European Parliament were sent on 23 September. Both institutions must now decide whether to endorse the extension. The EUDR page on the Commission's environment directorate still lists the 30 December 2025 date, unchanged since the first postponement. For companies that have already invested in traceability systems, the new delay is a mixed message: it rewards latecomers while penalising early movers. For the forests the law was meant to protect, another year of business as usual means another year of loss.