The EU deforestation law was proposed in June 2023 to propel environmental efforts by curbing logging and deforestation practices in nations that export to the EU. The legislation was a move towards reducing EU consumers’ impact on global deforestation,
however it saw pushback from multiple nations.
What is the EU deforestation law?
The law would ban the import of commodities linked to deforestation, reducing the EU’s impact on global forest degradation that will lower greenhouse gas emissions and biodiversity loss. The regulation is aligned with the
European Green Deal and
EU Biodiversity Strategy for 2030. The rule would require compliance by December 2024.
Brazil and Indonesia contested the regulation, along with 20 EU countries including Austria, France, Italy, and Finland, for the quick adjustment expected from global agricultural suppliers of exports such as cocoa, coffee, wood, rubber, soy, and beef.
What is the timeline for the EU deforestation law?
The EU has agreed to postpone the law to take effect at the end of next year to give businesses more time to adjust to its demands.
- On 29 June 2023, the deforestation regulation was proposed, the ban to be enacted on 30 December 2024.
- In October 2024, The European Commission proposed a delay to the law, but further changes to the rule demanded by the European People’s Party threatened the delay if an agreement was not reached. The changes included proposed a category of ‘no risk’ countries
that would have reduced checks.
- On 4 December 2024, these changes were dropped in an
EU meeting which confirmed that the law would be pushed, furthermore the Commission promised to update the law within the year.
- From 30 December 2025, operators and traders will be required to follow the ban, and from 30 June 2026 smaller businesses must comply.
What will the delay achieve?
Lead negotiator for the European Parliament in the talks, Christine Schneider, stated:
“We successfully postponed the implementation of the deforestation law by one year, giving European businesses, foresters and farmers the planning security they need, while protecting them from excessive bureaucracy.”
Enrico Aresu, compliance and financial crime industry practice lead for the DACH and Central-Eastern Europe regions at Moody’s, commented in favour of the delay: "The EU’s decision to delay implementation of the deforestation regulation is an opportunity
for businesses to proactively adapt their third-party risk and supply chain due diligence practices now. The year-long postponement acknowledges the complexity of understanding a supply chain and gaining transparency in today’s interconnected, globalised marketplace.
Whether now or next year, data and technology will be key to meeting these regulatory requirements.”
Schneider further detailed that within the year, the Commission will provide a risk categorisation platform for impacted businesses on the supply chain, and that there will be further assessments to incentivise countries to curb deforestation.
Aresu continued that the organisations will need to take advantage of the delay to invest in compliance infrastructure to strengthen supply chains, which will be able to prevent further instability in future regulatory changes.
The EU has been facing issues with nature financing and timeline management when it comes to sustainable initiatives, as seen during the
COP16 biodiversity summit that took place in October this year in Colombia, where representatives were struggling to come to an agreement on biodiversity funding.
Nevertheless, the landmark deforestation law reflects the EU’s commitment to combatting climate change by pushing for forest conservation and daring to change to the global supply chain.