The EU takes steps to extend the phasing-in time for the deforestation regulation – this is what it means

On 23 October, the European Parliament voted to fast track the European Commission’s proposal of extending the phasing-in time for the new Deforestation regulation by a year, by approving an urgent decision. This decision is yet another step towards providing operators and traders with additional time to take the necessary steps to ensure compliance. The European Parliament will vote on the proposal in the beginning of November. The Commission´s proposal entails that the new law would be applicable on 30 December 2025 for large companies and 30 June 2026 for micro- and small enterprises. Earlier in October, in conjunction with the Commission releasing its proposal, the Commission also published additional guidance documents to support global stakeholders, Member States and third countries in their preparations for the implementation.

Aims of the Regulation and Reasons for the Extension
The regulation, which was initially adopted by the co-legislators in 2023, aims at guarding that the products EU citizens consume do not contribute to deforestation or forest degradation worldwide. In essence, the regulation entails that any operator or trader who places certain commodities on the EU market, or exports from it, must be able to prove that the products do not originate from recently deforested land or have contributed to forest degradation. The commodities which fall within the scope of the regulation are agricultural products such as cocoa, wood, cattle, soy, palm oil, coffee, rubber and some of their derived products.

The Commission’s proposal to extend the phasing-in time of the regulation and the publishing of additional guidance rests on the feedback received from international partners about their state of preparations – which is reportedly uneven. Additionally, the EU has not yet completed the dedicated IT-system, which will be ready to start accepting registrations in early November and for full operation in December this year. The Commission’s hope is that the extension of the phasing-in time in combination with the additional guidance will ensure proper and effective implementation of the Deforestation regulation.

This is What it Means for Operators and Traders
The potential extension of the phasing-in time and the additional guidance provided create an opportunity for operators and traders to familiarize themselves with the new law and take steps to comply with the new regulation.

The legal requirement under the regulation differs both depending on the size of the enterprise, and the category of enterprise, i.e. operator or trader. Operators, as defined as a natural or legal person who places relevant products on the market (incl. via an import) or exports them in the course of commercial activity, are subject to more obligations than traders.

The new law entails that due diligence, in the form of information collection, risk assessment and risk mitigation, must be exercised. The due diligence statements must be submitted electronically in the designated IT-system created by the European Commission. These statements will be checked in the registry and by Member States’ authorities. The due diligence requirements for operators include:

• analyzing the supply chain and segregating the commodities placed on the market or exported from the market from commodities of unknown origin or from non-deforestation-free commodities at every step of the supply chain;
• collecting, organizing, and storing for five years information on how the operator complies with the regulation, as well as information on how due diligence is carried out; and
• publishing a public annual report about the activities taken to comply with the requirements under the regulation.