Latest on EUDR: Commission Rejects Delay but Proposes Streamlined Compliance and Grace Period

The EU’s legislation to halt global deforestation is moving forward. After briefly considering a further one-year delay, the European Commission has confirmed that the EU Deforestation Regulation (EUDR) will largely proceed on schedule.

In a move to ease the burden on businesses, however, the Commission has proposed changes designed to reduce the administrative load and provide a grace period for enforcement. These updates still require formal approval from the European Parliament and the Council of the EU before they can come into effect.

Agriculture ministers, sitting in the Council, already openly criticized the Commission’s proposal, and several governments see the tweaks as a policy U-turn, highlighting the political challenge to securing an agreement. Without formal adoption of the proposed reliefs on time, the original, unmodified EUDR will come into force for all operators on December 30, 2025, without any grace periods or streamlining for small businesses.

Compliance Timeline: Phased Implementation

The EUDR was already subject to a 12-month delay last year, which moved the original application date to the end of the year. The new proposal confirms that the regulation is now set to take effect on that date, but following a two-tiered, phased-in approach to compliance:

• Large and Medium Companies: The application date remains December 30, 2025. However, to facilitate a smooth transition and gradual phase-in, operators will benefit from a six-month grace period for checks and enforcement, which will run until June 30, 2026.
• Micro and Small Businesses: Recognizing the greater challenge for smaller entities, the proposal grants these businesses an extra year to comply, effectively pushing their deadline for application to December 30, 2026.

Streamlining Due Diligence: Focus on the “First Operator”

A key element of the Commission’s proposal is the simplification of due diligence requirements, easing pressure on the IT system. Under the new proposal, only the company that first imports a relevant product into the market will have to submit a due diligence statement (DDS). Meanwhile, companies further down the supply chain – such as retailers or manufacturers – that commercialize the products after they have been placed on the EU market will be relieved of the obligation to submit a DDS.

The State of Deforestation

These regulatory steps by the EU occur against a backdrop of increasing urgency on the global stage: the world is currently 63% off track from reaching zero deforestation by 2030, with 8.07 million hectares of forest loss recorded in 2024.

In response to this significant gap between commitment and reality, new financing models will be a centerpiece of discussions at COP30 next month. There, the Brazilian government plans to launch the Tropical Forest Forever Facility (TFFF), which includes an investment arm called the Tropical Forest Investment Fund. Projections indicate that the mechanism should mobilize $4 million in annual funding, three times the amount invested globally in the protection of tropical forests through concessional resources.

The expectation at COP30 is that the TFFF will make forests a “serious investment theme” by integrating them with corporate strategy and financial instruments such as insurance, to build demand for deforestation-free supply chains. However, non-profit group Global Witness cautions that new finance alone is no substitute for robust regulation. They warn that the TFFF should be accompanied by binding laws that prevent the financing of deforestation, alongside measures to improve accountability and support for Indigenous peoples and local communities.

Conclusion: The Corporate Imperative

The EUDR continues to evolve, with the latest proposals confirming the EU’s commitment to the core goal of the regulation while demonstrating flexibility to ease the administrative burden. However, the true lesson of these updates – particularly the granted grace periods – is that they offer a crucial window for proactive action, not an excuse for delay.

With global deforestation accelerating and a massive financial realignment underway, the incentive for change is now squarely on companies to build resilient, verifiable, deforestation-free supply chains.