On 2 October 2024, after months of speculation, the EU Commission announced a proposal for a further 12 months of “phasing-in” time for the implementation of the EU Deforestation Regulation (“EUDR”), as well as the publication of its long-awaited guidelines and updated FAQs relating to the EUDR (see press release here). The announcement of the extension comes after multiple global stakeholders, including German chancellor Olaf Scholz, called for implementation to be delayed amidst concerns about the readiness of in scope businesses.
Extended Implementation Period
Businesses within the scope of the EUDR will have a further 12 months to comply with the requirements. Under the EU Commission’s proposal, which will need to be approved by the European Parliament and Council, the EUDR will enter into force on:
- 30 December 2025 for large companies, rather than 30 December 2024; and
- 30 June 2026 for micro- and small enterprises, rather than 30 June 2025.
This extra 12 months is intended to serve as a “phasing-in period” to ensure proper and effective implementation of the EUDR.
Other key developments
Importantly, the EU Commission has also finally announced the publication of its guidelines (see here) and an updated FAQ document (see here) which it says will provide additional clarity to companies and enforcing authorities to facilitate the application of EUDR.
The additional guidance covers the functionalities of the Information System, updates on penalties, and clarifications on critical definitions such as ‘forest degradation’, ‘operator’ and ‘placing on the market’. The updated FAQ contains over 40 new answers to address questions that have been raised by stakeholders.
The Commission has also announced the publication of the principles of the methodology that it will apply to the EUDR benchmarking exercise, which will classify production countries as low, standard or high risk. This methodology will result in a large majority of countries worldwide being classified as “low risk”, meaning that products from those countries can benefit from simplified due diligence.
We will provide additional commentary on the these points in due course.
Next Steps and Key Takeaways
The Commission’s proposal will now be discussed with the European Parliament and Council, who must approve it before it enters into force. It is not yet clear how smooth and quick the approval process will be, or whether the proposal will open the door for other amendments to be sought (see here for the proposal for an amending regulation).
However, from the press release it is clear that the Commission now considers the necessary conditions for smooth implementation to have been fulfilled and that its technical guidance is complete. If you have any questions on how this development may impact your compliance with the EUDR, please reach out to our team for guidance.
