EUDR saga continues with provisional agreement dropping ‘no risk’ categories
The saga of delivering EUDR environmental laws took a further twist this week, as a provisional agreement within the European Parliament and Council has been brokered to remove controversial ‘no risk categories’ for countries from the legislation, writes Neill Barston.
As previously reported, the move by the European People’s Party seeking to place additional clauses into the major new frameworks designed to deliver transparency within supply chains and protect human rights, had attracted widespread criticism across political divides, with member states fearing it would create loopholes for nations to absolve themselves of engaging with the frameworks.
The latest round of discussions agreed an EU Commission’s proposal to delay the scheme’s start date – which was due to begin at the end of this month. Under its plans, this would now start at the end of 2025 for the largest corporations, with small and medium-sized enterprises having to comply by June 2026.
However, the latest ‘trilogue’ discussions have now proposed an ’emergency brake’ into the system, stating that the scheme could face yet further setbacks if the IT infrastructure underpinning the satellite mapping linked to the farm-level monitoring of the system is not ready – which the EU has stated it will be. The clause also states that the legislation could also be postponed if risk classifications are not published at least six months before the deadline.
The EUDR proposals will now go before a final session expected next week for final ratification – if no agreement is made there, then the legislation will proceed as planned from this month – but with general terms now settled, observers have not considered this a likely outcome.
In response to yesterday’s decision, Mighty Earth environmental group expressed its concern. In a statement, the organisation said: “The substance of the EU’s landmark anti-deforestation law remains intact, but the decision to delay its enforcement leaves forests to fall for another year, with the deadly impact that brings for people, climate and nature.”
“Companies, which have spent billions to be compliant, have been badly let down, while EU markets remain exposed to products tainted by deforestation and human rights abuses. History won’t judge this debacle – and the politicians behind it – kindly.”
EU Commission proposals
In a statement on the issue, the Commission said its proposal was based on the fact that EU member states, non-EU countries, traders and operators asserted that they would not be able to fully comply with the rules if applied as of the end of 2024, despite the legislation having been fully agreed more than 18 months ago.
Following amendments from Parliament to create a new category of countries posing “no risk” on deforestation, the Commission promised a future assessment of simplified requirements for countries that have demonstrated effective and sustainable forest management practices for the core commodities such as cocoa, palm oil and soy that are included within the laws.
An “emergency brake” was also included so that the Regulation could be further postponed if the online platform for companies is not fully operational by 30 December 2025 or if the risk classifications of countries is not published at least six months before.
After the deal, Parliament’s rapporteur Christine Schneider (EPP, DE) said: “We promised and delivered: The one year postponement is agreed, so that businesses, foresters, farmers and authorities will have an additional year to prepare. In addition, we ensured that the Commission will complete the online platform and the risk categorisation in due time giving more predictability for all in the supply chain. Last but not least, an impact assessment and further simplification is to follow in the review stage for the low risk countries or regions giving countries an incentive to improve their forest conservation practices.
We would have preferred to see these improvements directly enshrined in the law, but Council refused disappointingly. It is now up to the Commission to deliver on its commitments. As Parliament, we will closely monitor this process, as reducing bureaucracy is urgently needed.”
Latin American impact
While the latest legislation is forged in the EU, it will have international impact in requiring companies importing from all spheres of the world that are operating in Europe to comply with the standards.
One such organisation seeking to engage with the topic is Koltiva, an environmental consultancy business that is providing compliance services within South America.
As the group stated, Latin America plays a pivotal role in EU agricultural imports. In 2023, Brazil’s coffee exports reached $7.35 billion, followed by Colombia with $2.9 billion. Peru, known for its premium cocoa, exported $102.12 million in cocoa beans to Europe. This significant trade highlights the pressure Latin American countries face in meeting EUDR requirements while maintaining their role as crucial suppliers to the EU.
For businesses in Latin America, this regulatory shift brings significant challenges. The lack of transparency and traceability in supply chains is a major obstacle. Without proper compliance, exporters face restricted EU market access, financial penalties, and potential damage to their reputations, risking billions in export revenues. For many Latin American producers, including cooperatives and SMEs, complying with the EUDR is not just an environmental obligation but a critical business necessity.
At KOLTIVA’s recent webinar, Beyond Traceability Talks, CEO and Co-Founder Manfred Borer highlighted the obstacles faced by Latin American businesses. “Infrastructure limitations, technological barriers, and the high cost of compliance make it challenging for many Latin America Exporters like Cooperatives & SMEs to provide verifiable data about product origins,” he noted. “A strategic balance between economic viability and environmental responsibility is essential.”
