As EUDR is delayed, 3Keel urges companies to stay focused on eradicating deforestation

Last week, the European Council published an update on negotiations about the EU Deforestation Regulation (EUDR), stating that agreement had been reached with EU Parliament on a further one year delay, as well as a number of additional amendments to the regulation.

It is disappointing and unwelcome news for responsible businesses that have invested significant resources in “EUDR readiness” and more broadly in ensuring the sustainability of their supply chains. In this blog, we clarify the latest changes and unpack the implications.

Preparing for implementation

The EUDR was passed in June 2023 as a flagship piece of legislation under the EU Green Deal. It demonstrated that the EU, as a globally significant market for commodities linked to the destruction of forests, recognised its role in driving demand and its willingness to act as a responsible partner to countries tackling deforestation. The EUDR required companies trading a targeted list of commodities to conduct due diligence to ensure that these were deforestation-free and legally produced. 

The EUDR was originally due to enter into force in December 2024 and has already been subject to a 12 month delay and some simplification. This new agreement goes considerably further. Whilst it has not yet fully completed the EU legal process, the political agreement means this is now largely a formality. Yet the agreement further extends uncertainty, as it includes the possibility for further changes within the next six months.  

What’s new?

The new agreement has multiple components:

1. A 12 month delay to the introduction of the EUDR, to December 2026 for large businesses and to June 2027 for SMEs. This is a full delay rather than the “grace period” originally proposed by the Commission.
2. Further simplifications for downstream companies, with due diligence obligations focused on those first to place an in-scope product on the market. Simplifications are also made for micro and small operators, who will now only need to submit a one-time declaration of compliance.
3. Exclusion of certain printed products (e.g. books and newspapers) from the list of products covered by the Regulation.
4. Simplification review by 30 April, with the European Commission responsible for identifying potential further changes that could be made before the regulation is introduced.

Our key takeaways

There has been opposition to the changes from NGOs, some businesses and investors, with real concern over both the amendments being made to the EUDR and the wider process. 

The proposal for a further simplification review in early 2026 perpetuates uncertainty over the requirements. Businesses need to avoid being distracted by having to re-adapt systems to meet new requirements, and should maintain focus on the core intent: effective due diligence and preventing illegality or deforestation. Collaborating with others in the sector to align on principles and to invest in sustainable production will be key to building supply chain resilience – businesses need to look beyond their value chain to mitigate risks.

The changes will add complexity for downstream actors in managing risk within their supply chains. It’s unclear what obligations they now have under EUDR, with the prospect of further changes in April. Businesses need to engage their supplier base to understand how due diligence is being carried out in order to meet their own targets and stakeholder expectations, as well as any EUDR requirements. 

Our recent white paper highlighted that the EUDR has been a major driver of the improved supply chain transparency that had long been demanded by downstream actors to understand the risks in their supply chain. Businesses need to engage along the value chain to prevent any backsliding in transparency and instead focus on using this data to help enhance resilience.