Insight Focus
The EU has delayed its anti-deforestation law. The postponement of the EUDR opens the door for the bloc to simplify regulations after pressure from major exporters such as Brazil, the US and India. The delay, officially blamed on IT issues, reflects broader concerns over costs, data security and complex risk classifications.
The new delay in the entry into force of the EUDR—the European anti-deforestation law—came as no surprise to some in the market, due to high uncertainty surrounding the regulations. Brazilian producers, for example, had already been expressing concerns about the extent of documentation required, particularly from small farmers.
The EUDR applies to products such as soybeans, cocoa, and palm oil, which cannot come from deforested areas.
Land is cleared for palm oil next to the rainforest in Indonesia
The initial expectation was that the law would come into effect at the end of 2024. However, a lack of clarity regarding the required procedures and pressure from several countries ultimately led to its postponement until December of this year. In September, the European Commission reversed its decision once again, pushing the date back to December 2026.
The official reason for the new postponement was a problem with the IT system. Behind the scenes, however, countries such as the US, India and Brazil had been intensifying pressure for simpler rules.
Now, the discussion revolves around a possible reformulation of the law—and the feasibility of its effective implementation by 2026. Bruno Capuzzi, an economist specialising in EU regulatory affairs and a researcher at the European University Institute, spoke with the CZ App about when we can realistically expect to see the regulation come into force.
Bruno Capuzzi, Publicity photo
Was the implementation really delayed by IT issues?
That was one of the problems, but not the only one. The EU began testing the IT system some time ago. European importers, who could be fined if they fail to meet the requirements, were even invited to test the platform. I spoke with some, and they said the system didn’t work as intended. In some cases, for example, satellite images of agricultural areas didn’t load correctly.
There are also concerns about data security. Some EU trading partners, such as the US, have expressed particular concern about this aspect.
And what were the other reasons for postponing the implementation of the law?
There is a sensitive point: the country risk classification. This system, which classifies countries as low, medium or high risk of deforestation, was only recently finalised.
One of the challenges is that, in some countries, data on topics such as environmental protection and agricultural frontier expansion may be available. In others, however, such data may be scarce. Applying the same criteria to very different contexts ends up being problematic and can result in discrimination.
In practice, the classification has taken on a political dimension. Countries in North America and the EU were considered low risk. Many Latin American countries, such as Brazil and Argentina, were classified as medium risk. Countries under economic sanctions, such as Russia, were considered high risk.
What was the consequence of this on the EU discussions on the law?
It generated significant internal criticism. Some countries within the EU have formally positioned themselves against the risk classification. This includes Brazil, Turkey, and the US, for example. It’s worth remembering that Brazil is a major food supplier to Europe, and the higher costs generated by the law could make trade more expensive.
Source: Comex
Why did the US, classified as a low-risk country, complain about the law?
The US exports large volumes of soybeans to the EU, and these exports will incur higher costs, as documentation—such as geolocation images—will be required to prove that the product did not originate from deforested areas. This requirement applies to all countries, including those considered low risk.
Source: USDA
There’s another issue: each country has its own environmental legislation, and a supranational law such as the EUDR, cannot override domestic laws. The US follows its own forest management model, just as Brazil has adopted the Forest Code, which sets limits on deforestation and establishes environmental preservation rules for rural properties.
Moreover, the EU can change a country’s risk classification if conditions change, meaning a country could move from low to medium risk.
What documents did the lower and medium-risk countries need to present?
Low-risk countries would need to submit fewer documents than medium-risk ones. These could include satellite imagery and documents provided by local authorities proving that the product didn’t come from deforested areas, for example.
For medium-risk countries, such as Brazil, the volume of documentation and the level of detail are greater. The law provides for a risk assessment, but it’s still not entirely clear what will need to be presented. According to the regulations, this analysis must consider indicators such as the degree of deforestation in the country and compliance with environmental legislation.
But isn’t it complex to carry out this type of analysis?
Yes. Adding the IT issues to this, we have a recipe for re-discussing the law—as is currently happening. Another aspect to remember is that elections for the European Parliament were held in 2024. The new composition of the European Parliament, which leans more to the right, has begun to question some environmental regulations approved during the previous term.
The perception is that these regulations do not favour trade. In the case of the EUDR, small and medium-sized producers could even be excluded from exports due to the difficulty of obtaining the necessary documentation and bearing the resulting costs.
Source: IBGE
What else has changed regarding the view on the EUDR?
The current perception is that the regulation was created by environmentalists, not technicians or trade experts. Some MEPs who took office last year even called for the creation of a zero-risk category, but this was rejected. Others questioned the way the risk classification was created. Several technical issues were also raised.
One of the main concerns is the difficulty of segregating products like soybeans, which would need to be separated on the farm, during transportation, and even at the port. This involves significant logistical complexity, and soybeans would become significantly more expensive, as would other products included in the EUDR.
What is the future for the EUDR?
One of the strongest proposals is simplifying the law. The idea is to streamline the requirements. European importers have suggested that, in the case of recurring purchases from a supplier, for example, environmental documentation could be submitted only once—after which the supplier would already be certified. These ideas are currently under discussion.
Can the law actually be implemented in December 2026?
Some members of the European Commission would prefer to see the law quietly forgotten, due to its complexity and the potential impact on the European economy. Higher import costs are generally passed on to consumers, generating inflation. The most likely path is to simplify the law, with it coming into effect at the end of next year.
