A group of major companies* including Nestlé, Mars Wrigley and Ferrero, among several others, issued a new letter calling on European lawmakers not to implement potential new delays and changes to the EU Deforestation Regulation (EUDR), a new law aimed at ensuring that products imported to or exported from EU markets no longer contribute to deforestation and forest degradation globally.
In the letter, the companies warn that new delays will increase market uncertainty, and unfairly punish companies who have already made investments to comply with the new requirements, while rewarding laggards.
The letter follows several weeks of speculation over the timeline for the implementation of the EUDR, starting with a proposal by EU Commissioner Jessika Roswall in September to delay the regulation for a year due to concerns that IT systems currently in place will not be sufficient to handle the data load created by the new rules.
In October, the Commission said that it still plans to have the EUDR enter into force at the end of this year, but introduced a 6-month enforcement grace period for enforcement for large companies, and said that small enterprises will not be covered by the regulation until the end of 2026. The Commission also introduced a series of changes to simplify the regulation, including shifting reporting obligations to focus on the operators that actually place the relevant EUDR products on the market, while downstream operators such as retailers or manufacturers would no longer be obliged to submit due diligence statements, requiring only one submission, instead of multiple ones, in the EUDR IT system across the supply chain.
Despite the Commission’s proposed simplification’s however, some EU member states are still pushing for a one-year delay, and calling for a “stop-the-clock” mechanism to allow an opportunity for lawmakers to re-examine the regulation, as well as for a new review clause which could open up the regulation to further simplification in the future. The EU Parliament is expected to vote on its position on the Commission’s proposals next week.
The new letter follows an initial letter from many of the same companies in early October against the initial proposed delay. In the new letter, the companies state:
“Any proposal for a ‘stop-the-clock’ mechanism or a simplification review clause, leading to a suspension of the EUDR without clarity on its final provisions, would be extending current legal and market uncertainty for the long run. This approach would inflict substantial sunk costs on companies which have made the necessary investments and on-the-ground engagement in preparation for the EUDR, and reward the laggards.”
The companies added that the potential moves “would fatally compromise the EU’s reputation as a reliable partner of producing countries in halting deforestation.”
While welcoming the Commission’s 6-month enforcement grace period, the companies also warned that some of its proposals would not achieve its simplification objective, but could instead result in new complexities for downstream operators such as retailers or manufacturers. The companies instead proposed a “streamlined system” for the EUDR, in which due diligence statements would be submitted only by companies first placing relevant products on the EU market, all companies would be required to establish a due diligence system and to react to any evidence of non-compliance, or substantiated concerns, about products in their supply chains, and to keep records of the companies they buy from and sell to.
The companies said:
“This system would preserve the principles of due diligence and traceability that are essential to meet the aims of the EUDR while reducing the number of due diligence statements needing to be filed and avoiding placing excessive burdens on companies.”
The EUDR was initially introduced by the EU Commission in November 2021, with proposals aimed at effectively banning deforestation-linked products on the EU market, and establishing strong compliance requirements for companies providing or utilizing key commodities and products such as palm oil, beef, timber, coffee, cocoa, rubber and soy, in addition to some of their derived products, such as leather, chocolate, tires, or furniture. The regulation was initially set to become applicable from the end of December 2024, but was already delayed by a year to give companies more time to prepare for its compliance obligations.
*Signatories to the letter include Agro Business Group, Alliance pour la Préservation des Forêts – Alliance for the Preservation of Forests, Association Technique Internationale des Bois Tropicaux – International Tropical Timber Technical Association, Barry Callebaut, Cémoi, Cérélia, CID, Danone, Exott, Fair Trade Advocacy Office, Ferrero, GT Rubber, Interholco, Mars Wrigley, Nestlé, Olam Agri, Precious Woods, Rainforest Alliance, Regional Rubber Trading Co. Pte Ltd, Rougier, SIPH, Socfin, Solidaridad, Thaitech Rubber Corporation, Teodor González, S.A., Tony’s Chocolonely, Tropicore, VOCAL Coffee Alliance, VOICE Network, and Von Bundit.
