EU deforestation regulation delay is a chance to fix what went wrong

The European Union’s Deforestation Regulation (EUDR) is often presented as a litmus test of the EU’s climate credibility.

Yet the recent decision by a majority of member states to back a German-led proposal to 'stop the clock' on implementation and reopen the law is not primarily the result of pressure from foreign governments or multinational exporters.

It reflects mounting domestic unease from farmers, industry and national administrations that earlier warnings about design flaws, costs and feasibility were not addressed.

The shift has been large. Countries that once defended the EUDR, such as France, now support a compromise delay and review.

In the Parliament, the European People's Party has pushed a “stop-the-clock” delay of up to two years.

This is a clear response to concerns raised by European farmers about administrative burdens, by SMEs about unclear guidance and IT systems, and by downstream companies about the practicability of full traceability for complex, blended supply chains.

Many of these concerns were visible long before the current impasse. Producer countries, traders, NGOs working with smallholders and parts of EU industry have long highlighted the absence of guidance, a slow roll-out of the information system, and the impact on smaller operators.

The EU Commission’s own “myth-buster” documents tended to downplay these implementation challenges and the risks to smallholders, describing compliance costs as negligible and suggesting that fears for small farmers in developing countries were overstated.

This communication strategy implied that critics were simply opposed to environmental ambition, rather than raising legitimate questions.

The delay reflects mounting domestic unease from farmers, industry and national administrations that earlier warnings about design flaws, costs and feasibility were not addressed

In the public debate, stakeholders who pointed to data gaps, traceability constraints or the lack of capacity in origin countries were frequently portrayed as seeking to weaken climate action.

Yet analyses from research institutes and law firms documented how geolocation, tight deadlines and incomplete guidance, risk excluding smallholders in Africa, Asia and Latin America from EU supply chains.

These are not anti-environment arguments; they concern who bears the transition costs, and whether rules are realistic given current infrastructure and governance.

Concerns from developing countries have likewise been treated as secondary.

Indonesia and several Latin American states have questioned the benchmarking of countries into different risk categories, the reliance on old deforestation data, and the limited recognition of domestic sustainability schemes.

Lessons to learn

If, as now appears likely, there is a formal delay later this year, the commission will have an opportunity to learn some lessons.

A “simplification review” clause that requires a report before May 2026 along with revision proposals, is a good start. But it will only be meaningful if the review addresses both fundamental issues and technical problems that have brought the regulation to a standstill.

Three areas stand out.

First, the EU needs a more realistic understanding of the supply chains that provide basic goods to European consumers, including palm oil, cocoa and coffee.

These commodities pass through multiple stages of aggregation, processing and re-export; they are embedded in food, feed, cosmetics and industrial products.

The latest council proposals, which shift due-diligence obligations primarily onto operators first placing goods on the EU market, acknowledge this complexity but also concentrate responsibility and liability on a smaller set of firms.

Second, the EU must reassess how initiatives of this scale can disrupt its bilateral relationships.

Measures as disruptive as the EUDR cannot simply be announced and then “wished into” compliance by trading partners.

In practice, many producer-country governments have struggled to mobilise the finance, data and governance reforms required to support millions of smallholders in meeting EU traceability and legality requirements within the envisaged timeframes.

Third, any changes must be WTO-consistent.

Recent discussions about creating a “no-risk” or “zero-risk” category for certain countries or for intra-EU trade raise significant legal questions.

Trade-law analyses have already highlighted that overly generous exemptions for some suppliers, combined with stringent requirements for others, could amount to de facto discrimination and be difficult to justify under WTO rules, especially if not closely tied to objective environmental criteria.

The current push to delay and reopen the EUDR is better understood as a warning sign than as a retreat.

The regulation has broad support at home and abroad, but there are clear administrative, diplomatic and economic limits.

There is a limited window to correct course: to acknowledge earlier implementation concerns, to treat developing-country partners as partners rather than rule-takers, and to ensure that any simplification remains WTO compatible.

If that opportunity is missed, the EU risks confirming the narrative that its green policies are unilateral, unworkable and unfair to its own operators and its trading partners.