Further Changes To The EUDR Considered Likely Before Implementation – CoffeeTalk

The EU Deforestation Regulation (EUDR) covers various commodities and is currently scheduled to apply to operators and traders starting at year-end. In late 2024, EUDR compliance was pushed back by a year, giving companies much needed breathing room to prepare. In May, the European Commission reduced companies’ due diligence obligations by designating the majority of countries as low risk and published new guidance intended to simplify and reduce the administrative burden of complying with the EUDR. However, the EUDR remains controversial and additional changes are likely.

The European Commission is planning a call for evidence on an environmental omnibus proposal, which is expected to result in an environmental omnibus simplification package in the fall. This omnibus would sweep in the EUDR. EUDR simplification is likely to be contentious, but “stop the clock” proposals pending simplification have not been nearly as contentious. Recent activity in the Council and Parliament and by some member states provide a sense of what may be part of an EUDR simplification proposal.

A short position paper, titled Simplification of the EU Deforestation Regulation (EUDR): difficulties in implementing the EUDR and the need for substantial simplification, was submitted by Luxembourg and Austria for discussion at the May 26 meeting of the Agriculture and Fisheries Council (AGRIFISH). The submission asserts that the requirements imposed on farmers and foresters by the EUDR remain high, may be impossible to implement, and are disproportionate to the objective of the Regulation. The submission calls on the European Commission to include the EUDR in its simplification plans and, pending the Commission’s proposals, further postpone the start date of the EUDR.

On July 7, 18 Ministers of Agriculture published a joint letter calling for the further simplification of the EUDR. The signatories urge the European Commission to swiftly include the EUDR in its simplification plans and, pending the Commission’s simplification proposals, to consider further postponing compliance. The letter expresses the view that the EUDR in its current form does not sufficiently take into account countries with effective forest protection laws and a negligible risk of deforestation, instead imposing disproportionate bureaucratic obligations on those countries.

The European Parliament has passed a resolution objecting to the country risk classifications adopted by the European Commission in May. The resolution, introduced by Austrian EPP Member of Parliament Alexander Bernhuber, calls for the Commission to repeal the country classifications, revise the country benchmarking system to ensure it is based on up-to-date data, allow for regional differentiation, and includes transparent weighting of risk indicators. It also calls for clear, time-bound, and transparent procedures for regularly reassessing country risk categorizations based on measurable progress and updated scientific data.

The Council position paper advocates for some of the same changes. Some of the concerns cited in the resolution include the following:

Data Quality and Methodological Robustness
The proposed country risk categorization does not accurately reflect current realities in the countries concerned, including relating to land-use dynamics and forest degradation, key developments in governance, deforestation trends and enforcement mechanisms or recent national efforts to prevent deforestation, updated land-use policies or real-time satellite monitoring improvements. Regional variability within countries is not accounted for. The risk categorization methodology is flawed because it focuses primarily on aggregate historical deforestation rates and does not provide sufficient flexibility to accommodate timely updates. There are not clear pathways for countries to have their risk categorization changed through demonstrable progress.

Low Risk Country Category
The use of net forest loss between 2015 and 2020 to determine risk category considers total forest area loss rather than deforestation, thus including areas of temporary forest cover change or forest management not associated with land-use conversion. There is not a clear rationale for the values used in the risk categorization methodology (noting that the United States falls just below the absolute low risk threshold and that this raises questions about the objectivity and robustness of the chosen benchmarks). The assessment of deforestation risk based on the expansion of cropland areas used for relevant commodities and the scale of livestock and wood production lacks precision.

Lack of Granularity and Context Sensitivity
The current system of three risk categories is insufficient to adequately differentiate between countries with vastly different levels of deforestation risk. The lack of a nuanced approach could undermine the incentive for more ambitious governments to take further action. The Commission should consider introducing a fourth “negligible risk” category to reflect that in certain countries or regions the risk of deforestation or forest degradation is effectively negligible due to robust legal frameworks, low land-use change dynamics, and sustainable land management practices.

Fairness, Legitimacy, and Global Engagement
The current country benchmarking system may disincentivize cooperation and data sharing by countries producing relevant commodities, particularly if they perceive the risk categorization as unfair or politically motivated. Environmental and civil society organizations from countries producing relevant commodities have raised concerns about the lack of inclusive consultation in the development of the country benchmarking system, highlighting the importance of participatory processes that involve indigenous communities, local stakeholders, and regional authorities.

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