Navigating the EUDR Delay: What It Means for Your Business
On Wednesday, October 2nd, the EU surprised everyone with a press release, announcing a proposed 12-month delay for the EU Deforestation Regulation (EUDR). This comes after months of pressure from both EU and non-EU countries, trade organizations and companies. Just last week, the EU informed the WTO that it was not considering a delay, yet here we are.
The proposed delay, pending approval from the European Parliament and Council, would shift the applicability dates by one year to December 30, 2025, for large companies and June 30, 2026, for micro- and SME companies.
On the same day, the EU delivered on several outstanding elements:
The EU’s dedicated EUDR website has been updated and restyled. It now includes key elements and definitions of the regulation, links to new and updated documents, and a new ‘EUDR Myth-buster’ page.
After 10 months, the EUDR FAQ has been updated. New and updated information is marked ‘NEW’ for easy reference. Some new elements include:
1.31. Sharing geolocation data: How can producers share the geolocation data when certain governments prohibit the sharing of such data? (NEW)
One of the main requirements for operators and traders under this Regulation is to gather geolocation data for the land where commodities and products for the EU market are produced (Art. 9(1)(d)). National laws that prohibit sharing this data cannot be used as an excuse to avoid this obligation. Operators and traders must upload this geolocation information into the Information System. Without doing so, they cannot meet the due diligence requirements (Art. 8) and are not allowed to sell or export these products in the EU.
This poses challenges, especially when forests are state-owned or local laws restrict geolocation data sharing.
3.6. Access to geolocation information: Will operators and large traders further down the supply chain have access, in the Information System, to geolocation information in due diligence statements submitted by upstream operators to the Information System? (NEW)
Upstream operators can choose whether the geolocation information in their due diligence statements is visible to downstream operators within the Information System. (page 27)
This addresses concerns from small companies worried about larger clients bypassing them to deal directly with suppliers.
The FAQ also clarifies domestic business relationships, processes during the transitional period, and states that bamboo is not within the EUDR’s scope.
The European Commission has also released a guidance document on the EUDR. The following items are covered:
Definitions of ‘Placing on the market’, ‘Making available on the market’ and ‘Export’
Definition of ‘Operator’
Date of effect and timeframe for application
Due Diligence and definition of ‘Negligible Risk’
Clarification of ‘Complexity of the Supply Chain’
Legality
Product Scope
Regular maintenance of a Due Diligence System
Composite Products
The role of certifications and third-party verification schemes in risk assessment and risk mitigation
Agricultural Use
Finally, the EU has published a document that clarifies which codes to use when you are importing products in the scope of EUDR, but the products are eligible for an exemption. This is how customs authorities will know why for the import of a relevant product no Due Diligence Statement reference number is mentioned.
The day after the announcement of the proposed delay, QIMA hosted a Fireside chat with Pallavi Sharma, Food, Agriculture and Biodiversity Lead at Business and Human Rights Compliance (BHRC). We discussed the proposed change and how it would affect companies. With the EUDR being a strict liability law, and the amount of work needed to get supply chains ready and commodities and products in compliance, we concluded that companies cannot stop what they’re doing. On the contrary, they should press on with implementation to ensure EUDR compliance, whenever the law becomes applicable to them.
More updates
While the world is holding its breath on the proposed delay, the EU presses on and has delivered the following on October 8:
The actual proposal for a regulation amending the EUDR is now available. It focuses on amending articles 29 (paragraph 2), 37 and 38 (paragraphs 2 and 3) which cover relevant timelines. It remains to be seen if the European Parliament and the Council will vote on this as is and on time, or whether they will try to re-open the entire regulation.
Information System Virtual Training Sessions
Spoiler alert: The training sessions are already fully booked immediately after they were released. The EU has posted registration forms for a number of training sessions on the EUDR Information System (TRACES) in October. As many others, we have written to ask for more sessions to be organized, allowing everyone interested to attend. We hope the sessions will also be recorded and made available to a wider audience.
A User Guide is now available on Circabc, outlining how to get set-up, create and manage due diligence statements in the future TRACES system.
What all this means for businesses in scope of the EUDR
As the proposed delay by the European Commission is not yet to be approved, businesses should not assume that this delay is confirmed. If approved, companies will have more time to make sure their products are EUDR compliant.
Companies cannot afford to relax and sit back but should make use of the extra time to engage with their supply chain, map the supply chains of the relevant products all the way to the farms and forest, collect data and information and perform risk assessments.
In the meantime, check out our EUDR Checklist and EUDR Fireside Chat to learn more.
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