EU Deforestation-free Products Regulation: the impact on businesses

Under the new EU mandate, a number of sustainability legislations adopted in the previous term are being reassessed, delayed or simplified as part of a broader push to streamline EU rules and support their effective implementation. The EU Deforestation-free Products Regulation (EUDR) is a prime example of this trend, with adjustments to its application timeline and a targeted review of its provisions aimed at reducing implementation challenges for businesses.

Originally set to apply from December 2024, the EU Deforestation-free Products Regulation has since been postponed, with its main due diligence obligations now set to apply from 30 December 2026 for large and medium companies, and from 30 June 2027 for most micro and small enterprises.  In May 2026, the European Commission published a simplification review including an updated guidance document and a draft Delegated Act on the product scope, currently open for public consultation until 1 June 2026. Together, these developments reflect a shift towards providing greater legal stability and digital tools to ensure the practical readiness of both public authorities and businesses.

For companies trading commodities linked to deforestation, this evolving policy landscape represents both a challenge and an opportunity. While the EUDR’s complexity highlights the difficulties of compliance, the revised timeline and targeted adjustments also give businesses more time to prepare and position themselves as frontrunners in sustainable and resilient supply chains.

In this article, Publyon explores what the EU Deforestation-free Products Regulation is, the latest political developments, and what EUDR means for operators and traders.

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. In addition, the aim is 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  chocolate, , 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 current status of the EU Deforestation-free Products Regulation?

The EU Deforestation-free Products Regulation (EUDR) was originally set to apply from 30 December 2024. However, concerns raised by Member States, third countries and economic operators about implementation readiness led to a first formal postponement in December 2024, shifting the application date to 30 December 2025.

As implementation discussions progressed, political attention in late 2025 moved beyond timing and towards the practical functioning of the Regulation.  Co-legislators reached a provisional political agreement on 4 December 2025 for a targeted revision aimed at reducing unnecessary administrative burden and improving legal certainty, while maintaining the Regulation’s core environmental objectives.

Indeed, following up on the December political agreement, in May 2026 the European Commission published a comprehensive simplification review and a package of further measures designed to reduce annual compliance costs for companies by approximately 75%. These developments have introduced several critical changes to the regulatory landscape:

• A “very simplified” regime for Micro or Small Primary Operators (MSPOs): these operators are now eligible for a streamlined reporting process involving a one-time declaration in the Information System.
• A revised scope that includes several additions (such as soluble coffee and some palm oil derivatives) and exclusions (such as leather and retreaded tyres).
• Operational Information System: the EU Information System is fully operational (launched in December 2024) and is being updated to reflect the 2025 revisions. New digital enhancements include automated application interfaces (APIs) and a voluntary grouping feature for businesses to manage multiple declarations more efficiently.

EU Deforestation-free Products Regulation’s implementation timeline

This is the finalised implementation timeline:

• The main due diligence obligations will apply from 30 December 2026 for large and medium operators and traders.
• Micro and small operators already covered by the EU Timber Regulation must comply with the EUDR as of 30 December 2026.
• All other micro and small operators will be subject to the rules from 30 June 2027.

What are the implications of the EU Deforestation-free Products Regulation for your business?

The Regulation introduces mandatory due diligence rules for businesses that place relevant commodities or derived products on the EU market, make them available on the market, or export them from the Union. The rules apply to commodities and products commonly associated with deforestation and forest degradation.  Concretely, for businesses, the implications of the EUDR depend primarily on their position in the supply chain.

The Regulation distinguishes between two categories of economic actors:

• Operators, who placerelevant 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 after they have been placed by an operator.

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 have been clarified in the 2026 package and can be divided into three steps:

Under the targeted revision, the responsibility for submitting the due diligence statement via the EU Information System lies exclusively with the operator first placing the product on the EU market. Downstream operators and traders are required to retain and pass on the reference number of the initial due diligence statement, rather than submitting a new one.

All due diligence statements must be submitted electronically through the EU Information System to the competent national authorities.

The roll-out of the Information System remains aligned with the revised application timeline, with the system  now fully operational and updated to reflect the most recent revisions ahead of the main application date of 30 December 2026. The targeted revision further seeks to improve its usability and technical functionality in response to concerns raised by Member States and economic operators.

EUDR obligations for small and medium enterprises

A different scenario opens for those operators and traders who are small and medium enterprises (SMEs). The May 2026 simplification package further simplifies the obligations for some of these actors by introducing a “very simplified” regime specifically for Micro or Small Primary Operators (MSPOs).

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. Key simplifications for MSPOs now include, for instance, simplified reporting, traceability flexibility and trader registration exemptions.  SME operators and traders will also have more time to adapt, as their obligations will  apply from 30 June 2027 under the new delay (unless they are already covered by the EU Timber Regulation).

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. 

Despite these simplifications, SME operators and MSPOs still retain legal responsibility in the event of a breach of the EU Deforestation-free Products Regulation.

Furthermore, if an MSPO’s business grows and they exceed the size thresholds for two consecutive financial years, they will eventually transition into the standard DDS submission regime.

Review clause, implementation challenges and business opportunities

Despite the postponement of the application of the EUDR to 30 December 2026, the publication of the May 2026 simplification package has shifted the policy debate by providing more legal clarity and administrative relief sought by stakeholders. The Commission successfully delivered the mandated simplification review on schedule, proposing measures intended to smooth the transition before the regulation becomes fully enforceable for larger firms on 30 December 2026. These adjustments reaffirm the EU’s commitment to eliminating forest degradation from global supply chains while maintaining economic competitiveness.

From an implementation perspective, many industries and EU Member States continue to raise questions about how the EU Deforestation-free Products Regulation will operate in practice. Although the European Commission has published several iterations of guidance,  both industry stakeholders and national authorities point to persistent ambiguities, particularly around risk assessment methodologies, geolocation requirements and the interoperability of corporate systems with the EU Information System.

The postponement of the Regulation, together with the subsequent targeted revision, underlines the complexity of operationalising the due diligence framework and delivering a functioning EU Information System at scale. At the same time, the revised timeline provides businesses with additional time to prepare, test internal processes and adjust compliance systems ahead of full application.

Beyond these challenges, the EU Deforestation-free Products Regulation also presents opportunities. Businesses that use the additional time to align early with the Regulation’s requirements can position themselves as credible and resilient actors within deforestation free supply chains. In doing so, they may strengthen their sustainability credentials, reduce future compliance risks and enhance their competitive position within their sector.

What are the next steps for the EU Deforestation-free Products Regulation?

For businesses within scope of the EUDR, the focus now shifts from headline deadlines to the phased implementation starting from 30 December 2026. This means closely following the formal adoption and national implementation of the targeted revision, as well as potential additional Commission guidance clarifying operational aspects of the Regulation. While the core due diligence framework remains unchanged, the agreed adjustments are likely to influence compliance strategies, internal reporting processes and interactions with competent authorities.

In parallel, a draft delegated act has been released which proposes targeted amendments to the Regulation’s product scope, including both the addition of certain downstream products and the exclusion of others. This draft act is currently open for public consultation, providing stakeholders with a window to submit their views. The feedback window remains active until 1 June 2026, and the Commission will take all received comments into account when finalising the initiative.

Against this evolving backdrop, businesses benefit from a structured approach that combines regulatory monitoring with practical implementation planning. Understanding how EU-level decisions translate into national enforcement, and how upcoming reviews may affect compliance expectations, will be key to managing risk and avoiding last-minute adjustments.

We at Publyon support organisations in navigating this evolving policy landscape by translating regulatory developments into concrete operational and strategic implications. Through targeted impact assessments and public affairs support, we help organisations anticipate change, engage with decision-makers and position themselves effectively as EU sustainability rules continue to take shape.