In this new European mandate, businesses are witnessing delays or reviews of several green legislations approved in the previous term. This is done by the European institutions to better match the EU’s environmental ambitions with a call for protecting the competitiveness of the industries operating in Europe. The EU Deforestation-free Products Regulation (EUDR) is a prime example of such a trend. Originally set to apply from December 2024, its implementation has now been postponed twice.
For companies trading commodities linked to deforestation, this evolving timeline is both a challenge and an opportunity. While the Regulation’s complexity and the delays highlight the difficulties of compliance, they also give businesses more time to prepare and position themselves as frontrunners in sustainable supply chains.
In this article, Publyon explores what the EUDR is, the latest political developments, and what the Regulation means for operators and traders. We also provide insights on how businesses can turn compliance into a competitive advantage in the EU market.
What is the EU Deforestation-free Products Regulation?
On 29 June 2023, the Regulation on deforestation-free products entered into force. The Regulation aims to control EU imports linked to deforestation, with the goal of minimising the impact of the EU economy on deforestation and forest degradation, but also to bring down greenhouse gas emissions and biodiversity loss.
The main driver of these processes is the expansion of agricultural land that is linked to the production of commodities such as cattle, wood, cocoa, soy, palm oil, coffee, rubber, and some of their derived products, including leather, chocolate, tyres, or furniture. The Regulation specifically addresses the commerce of such commodities and derived products, which will have to pass thorough due diligence checks before being placed in or exported from the European market.
What is the status of the EU Deforestation-free Products Regulation?
On 23 September 2025, European Environment Commissioner Jessika Roswall announced that the European Commission will propose to delay the implementation of the Regulation by yet another year, moving its application date to the end of December 2026. She argued that more time is needed to ensure a smooth roll-out of the new IT system and to avoid disruption for businesses.
This new delay builds on the previous decision taken in late 2024, when the European Commission proposed, and the European Parliament and the Council approved, a first 12-month extension, shifting the original start date from December 2024 to December 2025.
Roswall stressed that the latest postponement was not linked to external pressure from major trade partners or to ongoing trade talks with Indonesia. However, she left the door open to simplifying parts of the legislation, potentially through the upcoming EU Environmental Omnibus, set to be published by the end of 2025. The Commission will now discuss it further with EU ministers.
The Commission has formally notified the Council and the European Parliament of this new proposal, and a majority of EU member states had already voiced support for a further delay earlier in 2025.
Who is affected by the EU Deforestation-free Products Regulation and what are the implications for your business?
The Regulation introduces mandatory due diligence rules for businesses placing and making available on the Union market, as well as exporting from the Union relevant commodities or related products usually linked to deforestation and forest degradation.
Within these specific businesses, the EU Deforestation-free Products Regulation makes a distinction between two types of actors which are affected by due diligence obligations:
- Operators, who place relevant commodities or products on the European market for the first time or export them;
- Traders, who make relevant commodities or products available on the European market.
Obligations under the EU Deforestation-free Products Regulation
While there is a distinction in definitions between operators and traders, both actors have to follow the same due diligence obligations, which can be divided into three steps:
1. Collection of information
Documents and data showing that the product is deforestation-free and legal, such as geolocation coordinates, quantity, country of production, etc.
2. Risk Assessment
Assessment of whether there is a risk that the product does not comply with the rules laid down in the Regulation.
3. Risk mitigation
Adoption of risk mitigation procedures and measures if there is a significant risk that the product does not comply with the rules.
In addition, both operators and traders have to submit a Due Diligence Statement electronically via a new Information System to competent national authorities. The Information System was originally expected to welcome registrations in November 2024 and open to all users in December 2024. However, due to the newly announced delay, its full roll-out will now be aligned with the new December 2026 deadline.
Should the latest extension be confirmed, all due diligence obligations will start to apply from 30 December 2026, instead of the previously postponed date of 30 December 2025.
A different scenario opens for those operators and traders who are small and medium enterprises (SMEs). In the case of SME operators or SME traders, both actors have fewer obligations and can rely on due diligence already carried out by traders or operators in their supply chain. However, SME operators still retain legal responsibility in the event of a breach of the EU Deforestation-free Products Regulation. SME operators and traders will also have more time to adapt, as their obligations will most likely apply from 30 June 2027 under the new delay.
Finally, operators sourcing commodities entirely from areas classified as low risk will be subject to simplified due diligence obligations, as they will only need to collect information and documents proving that the commodities are deforestation-free and legal.
Non-compliance with the EU Deforestation-free Products Regulation
Member States are mandated to implement the obligations set out in the legislation and establish penalties for violations of the Regulation’s provisions. According to the EU Deforestation-free Products Regulation, penalties must be effective, proportionate, and dissuasive, and Member States are responsible for implementing and notifying the EU Commission of these penalties, which can include:
- Fines: Companies can face significant fines proportional to the environmental damage caused and the value of the products involved. These fines can be at least 4% of business’ annual EU-wide turnover from the previous financial year.
- Confiscation: Authorities can confiscate both the non-compliant products and the revenues generated from these products.
- Temporary Exclusions: Non-compliant companies may be excluded from public procurement and access to public funding for up to 12 months.
- Market Restrictions: In cases of serious or repeated violations, companies may be temporarily banned from selling or exporting their products.
- Due Diligence Restrictions: Non-compliant companies can lose the right to simplified due diligence procedures for serious or repeated infringements.
Challenges and opportunities of the EU Deforestation-free Products Regulation
In terms of challenges, numerous industries and EU member states continue to raise concerns about the apparent lack of clarity from the European Commission in terms of the legislation’s implementation. While the European Commission published various iterations of their guidance documents (the latest version is from April 2025), both industry stakeholders and national capitals complain about the unclarity of the documents issued and are worried about the additional bureaucracy that they will be facing to comply with the legislation.
The latest postponement reinforces these concerns, as it highlights the complexity of implementing the IT system and the scale of administrative burdens foreseen for businesses. At the same time, it gives companies more breathing space to prepare and adjust their compliance systems.
Apart from these challenges, the EU Deforestation-free Products Regulation could be beneficial for those businesses that are already prepared to align with the Regulation’s requirements as soon as the text enters into application. This would make these businesses sustainable frontrunners within their specific sector, thus enhancing their reputation and market positioning vis-à-vis competitors.
What are the next steps?
Businesses within the scope of the legislation are advised to assess the requirements laid down under the Deforestation-free Products Regulation while seizing opportunities to drive sustainable growth and resilience in the market. They should also closely monitor the ongoing negotiations between the Commission, the Council and the European Parliament on the confirmation of the December 2026 delay, as well as potential simplifications to the substance of the rules.
Publyon offers tailor-made solutions to navigate the evolving policy environment at EU level and anticipate the impact of the most relevant EU sustainable policies and political developments on your organisation. Publyon advises organisations to:
- Ensure compliance with EU regulations by assessing their impact on operations: Publyon’s Policy Impact Scans provide organisations with a roadmap for navigating complex legislation and identifying the key EU and international policies that affect their business. This enables you to develop or adapt your business strategy with confidence and clarity, from day-to-day operations to the boardroom.
- Develop a public affairs strategy to have a say in legislation that impacts your business: Publyon provides expert advice and guidance to help you understand legislation and its potential impact. Together we can tailor strategies to your organisation, influence the legislative process and build relationships with key decision-makers. Keeping abreast of EU sustainability developments ensures that you are well placed to take advantage of the opportunities presented by the ongoing green transition.
At Publyon, we have a proven track record and extensive network that can help you realise your ambition to access policymakers by influencing and contributing to the political agenda.
Do you want to know more?
Do you need help getting a better understanding of what the EU Deforestation-free Products Regulation will mean for your organisation?
Fill out the form below and our team of experts will get in touch with you.
