Last updated: 30 December 2025
Overview
On 31 May 2023, the new EU Regulation (2023/1115/EU), aimed at tackling deforestation and forest degradation (2023/1115/EU) (“Deforestation Regulation”), was published in the Official Journal of the EU. The Deforestation Regulation requires companies to undertake due diligence into the source of a wide range of commodities, including cattle, cocoa, coffee, palm oil, rubber, soya and wood, to ensure that they have not been obtained as a result of deforestation.
The Deforestation Regulation forms part of the European Green Deal initiative and aims to ensure that EU consumption does not contribute to global deforestation and forest degradation arising from agricultural expansion linked to these commodities. It was proposed in response to estimates that EU consumption accounts for 10% of global deforestation, specifically arising from the conversion of forestry to agricultural land for the production of commodities. The Deforestation Regulation aims to assure EU consumers that products bought on the EU market do not contribute to global deforestation and forest degradation.
The Deforestation Regulation was previously set to enter into force on 30 December 2024 for large companies, and 30 June 2025 for micro and small enterprises. In October 2024, the European Commission announced a proposal for a further 12 months of “phasing-in” time for the implementation of the Deforestation Regulation. The proposal was agreed to by the European Parliament in December 2024.
On 4 December 2025, negotiators from the European Parliament and European Council reached a provisional agreement to postpone the Deforestation Regulation by a further year. On 23 December 2025, a revised Deforestation Regulation 2025/2650 was adopted and published in the Official Journal of the EU, shortly before the Deforestation Regulation was due to come into effect on 30 December 2025. In addition to postponing the implementation of the Deforestation Regulation, the revised Deforestation Regulation contains substantial simplifications to both its scope and obligations. Further simplifications may also be forthcoming: the European Commission is required to conduct a simplification review and deliver a report by 30 April 2026. This report should assess the impact and administrative burden of the EUDR — particularly on smaller operators — and propose solutions to address identified challenges. Where appropriate, the report should be accompanied by a legislative proposal.
The Deforestation Regulation will apply from 30 December 2026 for large and medium operators and traders, and from 30 June 2027 for small and micro operators.
The scope of the new regulation
The Deforestation Regulation will repeal and replace the EU Timber Regulation (995/2010/EU), which applied to timber and certain types of timber products. The Deforestation Regulation expands the scope to include commodities associated with deforestation, including cattle, cocoa, coffee, palm oil, rubber, soya and wood, as well as derived products, such as leather, chocolate, furniture and palm oil derivatives. Notably, under the revised Deforestation Regulation adopted on 23 December 2025, “printed products” (chapter 49 in the Combined Nomenclature system) are now out of scope of the regulation.
The Deforestation Regulation will primarily affect businesses first placing the above commodities on the EU market or exporting them from the EU. The key sectors affected include retail, food and beverage, apparel, automotive, life sciences, biofuels, paints and coatings, and cosmetics.
In May 2025, the EU Commission published its benchmarking system to assess source countries to determine the level of risk of deforestation and forest degradation. Commodities originating in “low-risk” countries will be subject to a simplified due diligence procedure, whereas the procedure for “high-risk” countries will be more demanding. Under the benchmarking system, all EU Member States are classified as “low-risk.” Only four countries (Belarus, Myanmar, North Korea and Russia) are classified as “high-risk”.
Obligations of suppliers in relation to the Deforestation Regulation
Businesses placing relevant products on the EU market (or exporting them) will be required to ensure that products are “deforestation-free.” This means that products must be produced on land that has neither been deforested after the 31 December 2020 cut-off date, nor seen the conversion of primary and naturally growing forests into plantations. Further, products must have been produced in compliance with all applicable and relevant laws in force in the country of production, including those relating to human rights, and the rights of local indigenous populations must have been respected.
Businesses will need to demonstrate effective due diligence procedures, covering information gathering, risk assessment and risk mitigation measures. Importantly, before placing on the market or exporting, businesses will be required to submit to the authorities a due diligence statement confirming that the relevant checks have been undertaken and identifying the specific geolocation of all plots of land where the relevant commodities were produced to help facilitate compliance checks.
Under the revised Deforestation Regulation, the obligation to conduct due diligence and submit the due diligence statement has been significantly limited and will fall exclusively on those operators first placing the product on the EU market. The first downstream operator or trader in the supply chain is only required to collect and retain the reference number of the initial due diligence statement. This is a significant departure from the previous Deforestation Regulation, under which operators and traders throughout the EU supply chain were required to submit a due diligence statement.
The revised Deforestation Regulation also introduces the concept of “micro and small primary operators” (being natural persons or micro/small enterprises established in low-risk countries by 31 December 2024 that place on the market or export products that they themselves have grown, harvested, obtained or raised). These operators will only be required to submit a one-time simplified declaration, rather than a full due diligence statement.
Enforcement
If a supplier is found to be noncompliant with the Deforestation Regulation, the competent national authorities designated by each member state are entitled to do the following:
- Confiscate regulated products and any revenues gained from transactions involving confiscated products
- Issue fines of up to 4% of a trader’s total annual turnover in the EU
- Temporarily exclude businesses from public procurement processes and public funding for up to 12 months
- In the case of serious and/or repeated infringements, temporarily prohibit exports of regulated products in the EU market and the exercise of the simplified due diligence process
Why is this important?
The Deforestation Regulation will impose due diligence obligations on a much wider range of products than the previous Timber Regulation regime. Depending on their position in the supply chain, businesses will need to ensure that they have due diligence processes in place that include information gathering, risk assessment and risk mitigation measures. Businesses should also monitor any additional changes arising from the simplification review carried out in April 2026.
The Deforestation Regulation sits alongside a number of regulations and proposals in the EU aimed at requiring companies to take greater responsibility for the impact of their extended supply or value chains on human rights and the environment, including the European Commission’s Corporate Sustainability Due Diligence Directive and the Regulation Prohibiting Products made with Forced Labour.
