EU Takes Steps to Simplify Deforestation Regulation for Businesses

Key Takeaways

• Simplified Reporting: Businesses can now submit due diligence statements annually and reuse previous statements for reimported goods, reducing the paperwork and frequency of submissions.
• 30% Reduction in Administrative Burden: The new simplifications are expected to cut administrative costs by 30%, making compliance more efficient for companies.
• Global Support: The EU has committed €86 million to help global partners transition to deforestation-free supply chains, fostering sustainable practices worldwide.
• Clarifications for Businesses: The Commission has published new guidance and opened a public consultation to clarify the EUDR’s scope and product categories, ensuring clearer compliance requirements.

Deep Dive

In a move that will surely be welcomed by many businesses throughout the European Union (EU), the European Commission has announced new measures to simplify the implementation of the EU Deforestation Regulation (EUDR), reducing the burden on operators and traders while maintaining the regulation's environmental goals. As the EUDR is set to fully come into force at the end of this year, these changes aim to make compliance easier without sacrificing the core focus: tackling deforestation, climate change, and biodiversity loss.

The new measures are based on feedback from various stakeholders (including businesses, EU Member States, and partner countries) and are designed to ensure that companies can meet their obligations without getting bogged down by unnecessary paperwork. With today’s updates, the Commission is not only responding to industry concerns but is also delivering on its promises to the European Parliament and the Council, guaranteeing clarity and regulatory certainty.

What exactly is changing though? A lot of the new updates focus on simplifying how companies report and demonstrate compliance:

• Reusing Due Diligence Statements: For businesses that bring goods back to the EU market, they can now reuse existing due diligence statements rather than submitting new ones each time. This means less paperwork and fewer submission requirements.
• Simplified Reporting for Group Companies: If a company is part of a group, an authorized representative can submit a due diligence statement on behalf of the entire group. This saves time and reduces the number of statements filed.
• Annual Instead of Batch-Based Reporting: Instead of submitting a new due diligence statement for each shipment or batch, companies can now report annually. This cuts down on the administrative burden significantly.
• Easier Due Diligence Checks: For larger companies, the new system simplifies the due diligence process by allowing them to collect reference numbers from their suppliers’ due diligence statements, rather than requiring a full submission for each product.

These updates are a direct response to the concerns of companies operating in the EU market, with the Commission estimating that they will lead to a 30% reduction in administrative costs. This is a win-win – companies can stay compliant without facing excessive red tape.

More Clarifications and Updates

Along with the updated guidance, the Commission has also published a new Delegated Act for public consultation, which will offer more detailed clarifications on the scope of the regulation. This will help businesses understand the specific product categories covered by the EUDR and ensure they are fully informed as they prepare to comply.

The Commission is also finalizing a country benchmarking system, which will be implemented by June 2025. This system will ensure that the regulation is applied consistently across all Member States.

The Commission has also been actively engaging with stakeholders from around the world to ensure a smooth rollout of the EUDR. Since 2024, the Commission has hosted over 300 meetings and 50 webinars, with over 15,000 participants, providing valuable insights into how businesses can navigate the new rules.

On top of this, the EU has committed €86 million through the Team Europe Initiative to support global partners in transitioning to deforestation-free, sustainable value chains. This initiative is crucial for ensuring that the global supply chain aligns with the EU's sustainability goals.

Championing Simplicity and Sustainability

Jessika Roswall, Commissioner for Environment, Water Resilience and a Competitive Circular Economy, reflected on the Commission’s approach, "We are committed to implementing EU rules on deforestation in a spirit of close partnership, transparency, and open dialogue. Our aim is to reduce the administrative burden for companies while preserving the goals of the regulation. We will continue to work very closely with all stakeholders to ensure that our rules deliver on reducing global deforestation and forest degradation in the least burdensome way for companies."

The EU Deforestation Regulation is one of the most important tools in the EU’s fight against climate change and biodiversity loss. By ensuring that products in the EU market do not contribute to deforestation, the regulation aims to create a more transparent and sustainable supply chain.

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