Deregulating Deforestation – real effective simplification or playing regulatory Jenga?

In autumn, the leaves of the trees tend to change. The same can be said for the Commission’s position regarding the date when the provisions of the European Deforestation Regulation 2023/1115 (EUDR) should become applicable to companies. In contrast to the Commission's statement in September 2025 that it is considering delaying, in general the EUDR's applicability by one year, the Commission’s official legislative proposal (COM/2025/625 final) of 21 October 2025 (the Proposal) mentions that it will only partially postpone the EUDR’s applicability for small and micro-sized companies. In addition, the Commission’s Proposal also aims to further deregulate the EUDR on top of the already provided ‘simplifications’ in the recent Guidance Notice on the Deforestation Regulation (Guidance Notice) of April 2025.

In this blog, we discuss the impact of the Commission’s proposal to amend the EUDR in light of the Commission’s intended ‘simplification strategy’ and briefly outline the offered simplifications from the Guidance Notice. 

Background

On 29 June 2023, the European Deforestation Regulation 2023/1115 (EUDR) entered into force as the world’s most far-reaching type of legislation to address the issue of global deforestation by regulating the EU market. After postponing the EUDR’s applicability by one year, all signs looked green for the EUDR’s obligations on (non-SME) operators and traders to become applicable by 30 December 2025. In light thereof, the Commission took initiative and published its Guidance Notice to provide clarity but also to already provide certain administrative ‘simplifications’ for the sector. 

However, in light of geopolitical pressure, the current EUDR’s applicability date may not be so set in stone. On 23 September 2025, the Commission announced in its letter to the European Parliament that it considered to postpone the EUDR by another year (i.e. 30 December 2026). This would mark the second postponement of the regulation, pushing the actual entry date to 30 December 2026. Surprisingly, the Commission’s Proposal turned like leaves in the wind. 

Postponing the EUDR’s applicability date

Initially, the Commission clarified in its Guidance Notice that the obligations of the EUDR will not become applicable to small and micro-sized undertakings on 30 December 2025 but on 30 June 2026. 

In the Proposal, only the applicability of the EUDR’s obligations for small and micro-sized companies will be postponed by another six months (i.e. 30 December 2026 instead of 30 June 2026). Consequently, and in contrast to the Commission’s earlier announced considerations, the EUDR’s obligations for non-SME operators and traders will become applicable as of 30 December 2025. In addition, the Proposal also introduces an enforcement grace period until 30 June 2026 (which, for small and micro-sized companies, will of course coincide with its postponed applicability date of 30 December 2026). Moreover, if a competent authority detects or is informed of non-compliance with the EUDR’s obligations before they have taken effect, it can issue warnings to companies, along with recommendations to help them achieve compliance.

Of course, the Proposal also must be adopted by the EU Institutions. Given the position of some Member States and the largest party in the European Parliament, it remains uncertain whether they will side with the Commission’s partial postponement for only specific types of undertakings. Particularly, considering the current geopolitical pressures on the EU by certain third countries. 

That said, various market parties also stated that they do not wish for the EUDR to be delayed but rather seek clear and more pragmatic guidance without harming the EUDR’s main objective.

Commission Guidance on the Deforestation Regulation 

Introduction 

With the Guidance Notice on the Deforestation Regulation, the Commission tried to provide some administrative relief from the EUDR’s obligations. This development cannot be seen in isolation from the call of the Draghi Report and – in light thereof – the EU’s Omnibus I Package (read the latest state of affairs here).

While this guidance notice is not legally binding, it provides valuable information on key aspects of the EUDR, making it essential reference material for those required to comply with the regulation. 

The EUDR – a brief recap

To comply with the EUDR, operators must ensure that the products they put on the market fulfill the following conditions:

• They are deforestation free;
• They have been produced in accordance with the relevant legislation of the country of production;
• And they are covered by a due diligence statement. 

However, if the predominant land use is agricultural, then the land does not fall under the ‘forest’ definition. Furthermore, packaging material presented with goods inside and used exclusively to support, protect or carry another product will not be subject to the Regulation. 

Clarifications in the Commission’s guidance 

The Commission guidance offers clarification on definitions such as ‘negligible risk’, ‘operator’ and ‘trader’. A negligible risk entails that, based on a full product-specific assessment, the commodities or products show no cause for concern as being non-compliant with the EUDR. If the risk assessment and risk mitigation exercises conclude that any of the risk criteria reveal a non-negligible risk, then the product should be deemed as carrying a non-negligible risk. Meaning that the operator shall not place it on or export it from the Union market. An operator is any person who places a relevant product on the market for distribution to commercial or non-commercial consumers which entails selling or free-of-charge distribution, for the purpose of processing, and for use in its own business. A trader is a person in the supply chain other than operators who, during commercial activity, make relevant products available on the market. Whether a trader is subject to due diligence obligations depends on whether the trader is an SME or not. 

An operator must be aware of what legislation exists in each of the countries they are sourcing from as to the legal status of the area of production. The relevant legislation can consist of national and regional laws (including secondary legislation) and international law, including multilateral and bilateral treaties and agreements. Downstream non-SME operators and non-SME traders are under the obligation to ascertain that due diligence, including on legality, has been exercised by the upstream operator.  

Composite products may contain multiple relevant products under different commodities. In such cases, the operator placing the product on the EU market or exporting from it will only be required to conduct due diligence on the relevant products listed under the commodity deemed relevant in Annex 1 of the EUDR. For instance, for chocolate bars, the relevant commodity linked to it is cocoa. This means that the due diligence obligation and information requirements extend only to relevant products listed in the right columns of Annex I EUDR under the relevant commodity which the chocolate bar contains or has been made using. In this case, that includes cocoa powder and cocoa butter under the commodity cocoa.

Interplay of the CSDDD and the EUDR 

The guidance document also clarified the relationship between the CSDDD and the EUDR. Even though the CSDDD and the EUDR have different scopes, they are largely complementary, and both should be applied in a coherent manner to ensure effective due diligence. Where the specific due diligence rules under the EUDR conflict with the general rules of the CSDDD, the EUDR’s provisions, being lex specialis, prevail over the CSDDD.

Self-assessment 

While the EUDR sets out clear due diligence obligations – ensuring products are deforestation-free legally sourced and covered by due diligence statements – the practical implementation of these requirements depends largely on understanding supply chain complexity. The Commission guidance provides operators with a structured approach to evaluate the complexity through the following assessment questions: 

• Were there several processors and/or steps in the supply chain before a particular relevant product was placed on, or made available on, or exported from the Union market?
• Does the product contain relevant commodities sourced from several plots and/or countries of production?
• Is the product a highly processed product (which may itself contain multiple other relevant products)?

For timber,

• Does the product consist of more than one tree species?
• Have timber and/or timber products been traded in more than one country?
• Were any products processed or manufactured in third countries before they were placed on, or, made available on or exported from the Union market?

Other ‘simplifications’ stemming from the Proposal

To provide further ‘simplifications’, the Proposal introduces two new categories:

• ‘micro and small primary operators’ – i.e. individuals or small businesses operating in low-risk countries that grow, harvest, or produce relevant commodities themselves.
• ‘downstream operators’ – i.e any natural person or company that, as part of a commercial activity, places on the market or exports products made from relevant materials, provided these are covered by a due diligence statement or a simplified declaratio

Regarding micro and small primary operators, the Commission proposes to exempt this category from submitting due diligence statements. Instead, micro and small primary operators must provide a one-time simplified declaration or equivalent information through a recognized system detailing their activities and production sites. Once submitted, they receive a declaration identifier that must accompany all their products placed on the market or exported.

According to the Proposal, downstream operators will be following the same simplified due diligence obligations as traders, meaning they no longer need to prove that due diligence was exercised or submit a due diligence statement. However, non-SME downstream operators and traders must still register in the information system, given their major influence on supply chains and their key role in ensuring that products remain deforestation-free. Moreover, operators and traders – regardless of size – must continue to ensure full traceability by collecting and passing on reference numbers and declaration identifiers. 

The impact – regulatory Jenga?

Both the Proposal and the Commission’s updated offer some forms of administrative simplifications as well as valuable insights for operators who will need to comply with the EUDR. According to the Proposal, the EUDR’s obligations for large and medium-sized operators and traders are still set to become applicable as of 30 December 2025, with an enforcement grace period until 30 June 2026, provides clarity. It also provides small and micro-sized companies a few more months to become compliant with the EUDR’s obligations.

To some extent, the Proposal certainly provides some administrative relaxation by reducing the obligations for downstream operators and micro and small primary operators, as well as allowing small and micro-sized operators to submit a simplified declaration once. The question is whether these kinds of initiatives actually provide ‘simplification’ or rather constitute a subtle form of deregulation, which ultimately leads to more complexity. 

For instance, non-SME downstream operators and traders are required to register themselves in an information system instead of providing a due diligence statement. The question remains whether this really provides relaxation as the registration obligation still enables oversight and enforcement. To ensure compliance, non-SME downstream operators and traders would still have to conduct a form EUDR due diligence. 

A particular concern relates to achieving sustainability objectives and ensuring compliance with other EU ESG legislation; one could argue that the Commission’s proposed simplification may result in a regulatory Jenga of the EU’s ESG regulatory framework. Although the Commission, on the one hand, further clarified the relation between the obligations stemming from the CSRD/CSDDD and the EUDR, its guidance may become a dead leaf as the EU is also looking to the revise the scope of the CSRD/CSDDD.

In light of these (proposed) revisions, the Commission may risk causing more uncertainty. For instance, revising the scope of the CSRD/CSDDD would exclude a significant number of companies, while the sustainability risks remain. Particularly, because the EUDR specifically requires that the relevant products must be in accordance with the relevant legislation of the country of production. This encompasses compliance with:

1. land use rights;
2. environmental protection;
3. forest-related rules, including forest management and biodiversity conservation, where directly related to wood harvesting;
4. third parties’ rights;
5. labour rights;
6. human rights protected under international law;
7. the principle of free, prior and informed consent (FPIC), including as set out in the UN Declaration on the Rights of Indigenous Peoples; and
8. tax, anti-corruption, trade and customs regulations.

All the above-mentioned sustainability topics were covered by the CSRD/CSDDD and both provisions were interlinked with the EUDR and vice versa. By creating a harmonized approach for sustainability reporting and sustainability due diligence, the Green Deal was set out to create a level playing field in the area of sustainability, which also observed other types of more specific EU ESG legislation. By introducing isolated deregulations on a very short notice, the Commission may risk being playing a regulatory Jenga. The intention to provide more simplification could therefore, paradoxically, lead to even more complexity. 

Finally, it is important to note that the Proposal still needs to be adopted by the EU Institutions, which means that the Commission’s intended partial delay and proposed simplifications may not be out of the woods yet. 

As the applicability date for large operators/traders draws near, we recommend checking whether your organisation is ready for the EUDR as of 30 December 2025.