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EUROPEAN COMMISSION PROPOSES ONE-YEAR DELAY TO THE IMPLEMENTATION OF EU DEFORESTATION REGULATION(EUDR)

EUROPEAN COMMISSION PROPOSES ONE-YEAR DELAY TO THE IMPLEMENTATION OF EU DEFORESTATION REGULATION(EUDR)

The European Commission has proposed a one-year delay to the implementation of the EU Deforestation Regulation. This piece of legislation is aimed at curbing global deforestation and promoting sustainability, originally designed to prevent products linked to deforestation from entering the EU market. If approved, large companies will have until 30th December 2025 to comply while the small enterprises will have until 30th June 2026 but this proposal still needs to be approved by the European Parliament and the council and this approval is widely expected.

The European commission published further guidance (https://green-business.ec.europa.eu/publications/guidance-eu-deforestation-regulation_en) and this guidance is divided into 11 chapters covering various topics which include legality requirements, application period, agricultural use and explanations of the product scope. The guidance also deals with traceability obligations, the functionalities of the information system and sanctions as well as explanations of definitions.

The proposed delay is motivated by a desire to provide businesses, especially small and medium-sized enterprises (SMEs), with additional time to adapt to the new regulatory framework. Many stakeholders have expressed concerns about the challenges of compliance, including the need for traceability and due diligence in supply chains. The complexities of sourcing materials responsibly and ensuring that they do not contribute to deforestation are significant hurdles for many companies in developing countries.

The one-year extension will allow for more comprehensive guidance and support to be developed, ensuring that businesses are well-equipped to meet the requirements when the regulation eventually comes into effect. It will also provide an opportunity for further consultation with industry leaders, environmental groups, and other stakeholders to refine the regulation and address any outstanding issues.

This regulation is a crucial step in the EU’s broader sustainability agenda and its commitment to combating climate change. By delaying its implementation, the European Commission aims to strike a balance between ambitious environmental goals and the practical realities faced by businesses in transitioning to more sustainable practices. The decision reflects an understanding of the complexities involved in such a significant regulatory shift and a commitment to facilitating a smoother transition for all parties involved.

Traders had hastened their shipments in anticipation of the deadline according to international Coffee Organization (ICO) as companies would need to provide due diligence statements proving their products do not contribute to deforestation after the deadline. The rush among European coffee importers to accumulate stock before the deadline led to significant price volatility, driven by a surge in demand for coffee.