The EU Deforestation Regulation is coming (possibly later than expected)

The EU Regulation on deforestation-free supply chains (Regulation (EU) 2023/1115, or EUDR for short) is facing another postponement. After the effective date, originally planned for the end of 2024, was postponed by 12 months “at the last minute” last year, there are now signs of a further 12-month postponement – and changes to the content also appear to be possible.

Just recently, the so-called “omnibus packages” at EU level heralded the current trend toward less EGS regulation. Unlike, for example, the European Supply Chain Directive (“CSDDD,” see here), the EUDR has not been subject to restrictive regulations to date. Now there is a U-turn, albeit for different reasons: the EU commission apparently has doubts as to whether the existing IT infrastructure (specifically the “Traces” system) can process the considerable amounts of data associated with the launch of the EUDR. Since “Traces” is not only used for evidence under the EUDR, but rather represents a central database, a system collapse would be highly problematic. The postponement of the EUDR's effective date by a further 12 months is now intended to provide the time necessary for the secure expansion of the IT infrastructure.

This means that affected companies are likely to be granted a further grace period until the implementation of compliance obligations, which represent a considerable bureaucratic effort, becomes mandatory. This should also provide some relief, as the guidelines, examples, and FAQs provided by the EU Commission as assistance, some of which have taken on a life of their own separate from the text of the EUDR, have tended to increase uncertainty about the scope of the EUDR obligations. Not least for this reason, there are already calls for changes to the content of the EUDR, such as the introduction of a “zero-risk category”: such a “zero-risk category” would mean that the EUDR obligations would be completely waived for countries assigned to this category. In all likelihood, (most) EEA countries would benefit from this.

For the companies affected, the current uncertainty, despite the hope that the obligations will take effect later, is a challenge: internal processes may not only have to be postponed but also modified if the content of the EUDR changes. At the same time, no decision has been made to postpone the EUDR as things stand, so companies must continue to expect it to come into force at the end of 2025. It therefore remains to be seen when and in what form the EUDR will ultimately come into force – in any case, the question of “whether” is not yet widely asked.