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Writer's pictureMaria Marshella Gaviota

EU Parliament Postpones EUDR Implementation: A Win for Business Preparedness or a Missed Opportunity?


EUDR Delay: A Win for Business Preparedness or a Missed Opportunity - Koltva.com


  • On November 14, 2024, the European Parliament confirmed a 12-month extension for EUDR compliance following the European Commission’s October recommendation and the European Council’s endorsement, though the final deadline will ultimately be set once “trilogue” negotiations conclude. 

  • With the EUDR delay there is a risk for a potential global forest lost of around 2,300 square kilometers over 12 month time based on EU Deforestation Report 2022.  

  • To finalize the EUDR framework, several additional amendments will now move forward to "trilogue" negotiations involving the European Parliament, Council of the European Union, and European Commission. 

  • Businesses should prioritize swift action to meet the EUDR’s requirements, as early preparation will ensure a smoother transition and minimize risks when full implementation takes effect. 


On November 14th, EUDR delay confirmed after European Parliament vote, in a EU Parliament Plenary Session. As stated by ESGToday, The European Parliament voted 371 to 240 in favor of a one-year delay and amendments to the EU Deforestation Regulation (EUDR). This new legislation, designed to prevent products traded within EU markets from contributing to global deforestation and forest degradation, was initially scheduled to take effect at the end of this year, starting with large companies (ESG Today: 2024). Supported primarily by conservative and right-wing groups, this delay aims to give businesses additional time to adopt sustainable and traceable practices. Despite the approval, a large number of the Members of European Parliament (MEPs) abstained during the vote, resulting in a narrow majority in favour compared to those opposed (Confectionery Production: 2024).


This postponement has sparked concern among environmental advocates, as it could undermine the EUDR’s core objective to curb deforestation. According to EU studies, a 12-month delay could lead to an additional global forest loss of around 2,300 square kilometers, roughly the size of Moscow. Such widespread deforestation would accelerate climate change, damage biodiversity, and heighten the risk of extreme weather events, including floods, fires, and droughts (EU, 2022).


Despite these warnings, the Parliament’s decision to delay reflects considerable backing for granting businesses more time to comply. However, the final timeline for the EUDR will be determined through “trilogue” negotiations among the European Parliament, Council, and Commission, who will seek a consensus on the regulation’s framework (Euractive: 2024). This interinstitutional negotiation process, which includes discussions on the proposed extension and other amendments, is expected to conclude by the end of the year. Key updates on the EUDR during the plenary session include: 

  1. 12-Month Delay: The European Parliament’s amendment introduces a one-year delay, giving companies extended time to prepare for compliance. However, the final deadline remains contingent on trilogue outcomes. Prior to the vote, the European Peoples' Party (EPP) removed several amendments they had tabled, including Amendments 1, 2, 8, 13, 14, and 15. These amendments proposed extending the delay by two years (instead of one) and removing almost all obligations on traders from the scope of the regulation. (Food Navigator: 2024).

  2. Introduction of a 'No-Risk' Category: A significant new Amendment 11 introduces the concept of a 'no-risk' category for certain countries, which could exempt them from the regulation's stringent due diligence requirements. This classification would apply to countries with 'stable or increasing forest area development,' indicating a low or negligible deforestation risk. As a result, these countries would face less stringent obligations under the EUDR. The European Commission is expected to finalize a country benchmarking system by mid-2025 to determine which nations qualify for this status. (Euronews: 2024)

  3. Documentation Requirements for 'No-Risk' Countries: Another significant amendment, Amendment 6, outlines that products from countries classified as 'no-risk' may be placed on the EU market as long as they comply with the relevant national legislation and meet the documentation requirements. However, it's important to note that the "no-risk" designation does not eliminate the need for due diligence statements. The ongoing trilogue negotiations will be critical in determining the precise requirements needed to meet the deforestation regulation's targets. Countries demonstrating sustainable forest management practices and meeting the regulation's broader goals may be subject to less stringent requirements compared to others, ensuring a fairer compliance approach while maintaining the integrity of the regulation. (Euronews: 2024)

  4. The Trilogue Process: The trilogue discussions aim to consolidate the views of three key EU bodies as stated by Responsible Investor:

    • European Parliament (EP): Represents EU citizens

    • Council of the European Union (Council): Represents member states

    • European Commission (EC): The body responsible for proposing and implementing EU legislation

During this process, the entire legislative text will be reviewed and must be approved by both the European Parliament and the Council. The Commission also has the option to withdraw the proposal or oppose any amendments made by Parliament. If the Commission chooses to oppose, the Council would then require unanimous approval for those amendments, rather than the usual qualified majority (Responsible Investor: 2024).


EU Parliament Confirms EUDR Delay

Urgency and Opportunity: Accelerating EUDR Compliance for Long-Term Success

The EUDR centers around three key principles aimed at halting global deforestation: ensuring products are deforestation-free, adhering to local laws and human rights, and requiring mandatory due diligence declarations. Under the regulation, products must come from land that has not experienced deforestation or forest degradation since December 31, 2020. Companies must also demonstrate that their products comply with relevant national laws, including human rights protections and the rights of indigenous communities. Once the regulation is enforced, companies will need to submit a due diligence declaration via a central platform before trading, importing, or exporting goods. 

 

The EUDR applies to both operators and distributors. Operators, who introduce products into the EU market, are responsible for fulfilling due diligence requirements and ensuring traceability. Distributors have fewer obligations, mainly ensuring that operators' due diligence declarations are available upon request. 

 

To address the varying levels of deforestation risk across countries, the European Commission has established a benchmarking system that ranks countries based on their deforestation risk. Products from low-risk countries require basic due diligence, while products from high-risk regions will undergo more rigorous risk assessments. If risks are identified, companies must implement mitigation measures to ensure compliance. 

 

During the session, the European Commission introduced significant changes to the EUDR, including a new “no risk” category for countries or regions meeting specific criteria. These include having stable or increasing forest areas since 1990, signing international agreements such as the Paris Agreement, and rigorously enforcing deforestation prevention laws. This new classification system now includes high, standard, low, and no risk categories. Products from no-risk countries face fewer requirements, such as being exempt from providing geolocation data. However, operators must still submit basic documentation confirming the products are free of forest degradation and comply with local laws (Euronews: 2024).


Furthermore, the European Commission is required to ensure that the Information System and Country Benchmarks are fully operational at least six months before the new application date. If this is not met, the application date should be postponed. For no-risk countries, the inspection regime has been reduced to just 0.1% of operators, streamlining compliance for businesses in these regions while maintaining stricter requirements for higher-risk countries. 

 

KOLTIVA is at the forefront of supporting businesses navigate the EUDR transition. By offering tailored solutions, KOLTIVA equips companies to meet compliance requirements and operate sustainably. It helps businesses eliminate deforestation and navigate the complexities of EUDR compliance, positioning the businesses for long-term success in this evolving regulatory landscape.  

 

Maximizing the year-long postponement for EUDR compliance will be crucial for businesses, and tailored support addressing both upstream and downstream supply chain needs will be essential. For upstream support, businesses should focus on enhancing traceability by providing smallholders with technology to overcome challenges related to limited access to digital resources. Additionally, guiding smallholder producers and cooperatives through the certification process can help reduce the high costs of compliance, while training and capacity-building initiatives can empower them with the skills needed to meet sustainability standards and improve economic stability. On the downstream side, manufacturers need assistance in implementing due diligence systems that meet environmental and social responsibility standards. Integrating sustainability strategies within operations will be important to align with the growing consumer demand for sustainably sourced products. By leveraging traceability technology, businesses can streamline logistics and enhance supply chain transparency, ensuring that they meet quality, safety, and sustainability standards while improving cost-efficiency and reducing timelines. Companies — from operators to traders — also have to submit Due Diligence Statements (DDS) to the relevant authorities to verify that their products meet the EUDR’s sustainability criteria. KOLTIVA’s modular approach providing the holistic approach to effectively navigate the complexities of EUDR compliance, while also supporting their long-term sustainability goals. 

 

While the extended deadline offers more time, the urgency to address deforestation cannot be overlooked. Companies that act now to establish transparent, traceable supply chains will not only meet EUDR requirements but will also position themselves as leaders in a market that demands sustainability. Early action is the key to staying ahead of competitors and ensuring compliance in the long run. 

 

At KOLTIVA, we offer expert, tailored solutions to help you seamlessly navigate EUDR compliance. Our team will work closely with you to refine your strategies, ensuring that your business not only meets the regulatory demands but also builds a strong foundation for long-term success and environmental stewardship. Start now to unlock the full potential of your supply chain, mitigate risks, and lead the way in sustainability. 


 

Resources: 


  • ESG Today. 2024. EU Lawmakers Agree to Delay Ease Law Banning Deforestation Linked Products. Retrieved from https://www.esgtoday.com/eu-lawmakers-agree-to-delay-ease-law-banning-deforestation-linked-products/ 

  • Confectionery Production. 2024. Exclusive: European Parliament votes through controversial ‘no risk’ country EUDR amendments. Retrieved from https://www.confectioneryproduction.com/news/50382/fairtrade-international-welcomes-uk-prime-ministers-cop29-engagement-on-tackling-climate-change/  

  • Food Navigator. 2024. EUDR delay confirmed after European Parliament vote. Retrieved from https://www.foodnavigator.com/Article/2024/11/14/EUDR-delay-confirmed-for-12-months 

  • EU. 2022. Deforestation Report. Retrieved from https://circabc.europa.eu/ui/group/34861680-e799-4d7c-bbad-da83c45da458/library/5d098237-8bab-48a6-a6c8-2a907d80c791/details 

  • Euractive. 2024. EUDR: Parliament backs ‘no risk’ group, trade partners accuse EU of protectionism. Retrieved from https://www.euractiv.com/section/agriculture-food/news/eudr-parliament-backs-no-risk-group-trade-partners-accuse-eu-of-protectionism/ 

  • Euronews. 2024. EU deforestation law postponed and diluted by Parliament. Retrieved from https://www.euronews.com/my-europe/2024/11/14/eu-deforestation-law-postponed-and-diluted-by-parliament#:~:text=Another%20amendment%2C%20Amendment,countries%20have%20to.%E2%80%9D 

  • Responsible Investor. 2024. ‘Pure Chaos’: European Parliaments Votes in Favour of EUDR Delay and Amendments. Retrieved from https://www.responsible-investor.com/pure-chaos-european-parliament-votes-in-favour-of-eudr-delay-and-amendments/  About Writer  

    Writer: Maria Marshella Gaviota, Marketing Communication Officer at Koltiva  

    Editor: Daniel Agus Prasetyo, Head of PR and Corporate Communication at Koltiva


    Maria Marshella Gaviota, Marketing Communication Officer at Koltiva, blends her marketing expertise with a profound passion for agricultural technology. Armed with a background in marketing and a keen interest in agritech, she offers invaluable insights into the convergence of agriculture and technology. Maria's writing prowess in agritech extends to effectively communicating complex agricultural concepts, technological advancements, and their practical applications in the field.


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