What the EUDR delay means for your business

Last Thursday, the European Parliament voted in favour of delaying the implementation of the EU Deforestation Regulation by 12 months. Calls to delay the new law had prompted disgruntlement among many companies, including Hershey, Nestlé, Unilever, Mars and Barry Callebaut. Suggestions of creating a ‘no-risk’ rating for some countries – a move that would exempt entire countries from the key requirements of the law and present a loophole for companies to ‘launder’ non-compliant products – has been met with short shrift too.

The delay may appear to give companies more time. But, at PUR, we encourage businesses to act as though the EUDR is already in place. This extension should not be seen as flexibility to slow down. The need for deforestation-free supply chains is urgent, and now is the time to solidify commitments.

Why the EUDR matters

To recap: the EUDR is a landmark piece of legislation designed to curb the import and sale of products linked to deforestation within the EU. It applies to a number of goods commonly associated with the loss and degradation of forest – including everything from soy and palm oil to beef, cocoa and coffee. It not only targets illegal deforestation but also deforestation happening in legally sanctioned areas. That means products derived from land that has been legally cleared, but is still contributing to forest loss, is also being regulated.

The delay has sparked much debate, not least because of the realities of ongoing global deforestation. Despite efforts to slow deforestation rates in countries like Brazil and Colombia (which recorded 36% and 49% decreases in primary forest loss respectively between 2022 and 2023), the world continues to lose trees at a worrying rate.

The latest data shows that total tropical primary forest loss in 2023 totaled 3.7 million hectares; that’s the equivalent of almost ten football fields of forest per minute. Such rates have been consistent over the last few years, with little sign of progress. And this amount of deforestation produced 2.4 gigatonnes of carbon dioxide emissions – the same as half of the annual fossil fuel emissions of the United States.

So, can the world afford to delay action on addressing deforestation? Clearly not.

The power of regulation

One thing is clear: Regulation has the power to bring about real change. And the sooner legislation such as the EUDR comes into play the better. Policy and regulation gives companies, governments and solutions providers like PUR a useful framework to standardise approaches, foster transparency and provide clarity, so that everybody knows what they need to do. Without regulatory frameworks, sustainability often remains a low-priority item, with only a minority of companies taking significant voluntary action. For example, extended producer responsibility schemes – putting the onus on manufacturers to take responsibility for the entire lifecycle of their products, including end-of-life disposal – has encouraged companies to design products that are easier to recycle, reuse, or compost. In Europe, the EU’s Single-Use Plastics Directive has forced companies to rethink their packaging strategies, invest in compostable or fossil-fuel free alternatives, and support recycling initiatives.

The EUDR has the potential to drive companies to reimagine their sourcing strategies forever in a similarly powerful way.

Yes, the primary objective of the regulation is to reduce global deforestation. But another goal of the law is to promote greater transparency and sustainability in global supply chains. The stringent due diligence processes required by the regulation means firms will need to trace their products back to the plot of land where the commodity was produced, and demonstrate that the goods they trade comply with both the regulation’s deforestation criteria and local environmental laws. 

The incoming law also sets a global precedent for sustainable trade, sending a strong signal to global producers and exporters that sustainable production is no longer optional but mandatory to access key markets like the EU. It is a shift that is expected to have a ripple effect, encouraging countries that export agricultural commodities to adopt more sustainable land-use practices and forest management policies in order to maintain market access.

A chance to consider nature based solutions

To focus on the positive, the 12-month delay to the EUDR offers businesses a valuable window to better assess and adapt their supply chains. Companies can use this time to identify risks, establish traceability systems, and integrate sustainable sourcing practices. This delay is a chance for more thoughtful and strategic responses, giving companies the opportunity to conduct in-depth supply chain mapping to identify deforestation risks.

It is also a chance to consider how nature-based solutions (NBS), like those we champion at PUR, can be central to efforts to eliminate supply chain deforestation and restore and regenerate ecosystems. By investing in nature-positive projects such as agroforestry, reforestation and forest conservation, companies can address their deforestation footprint while fostering long-term environmental and social benefits. PUR works with businesses to develop projects that combine carbon sequestration with biodiversity and water conservation. These projects are based on the same principles as the EUDR – transparency and traceability – and also contribute to broader sustainability goals, such as addressing Scope 3 carbon emissions, net zero contribution and ecosystem restoration. For instance, the data requirements to implement EUDR can be leveraged for more streamlined investments into Scope 3 reductions.

Our projects not only tackle deforestation but also put farmers and their communities at the heart of efforts to combat deforestation. This supports the livelihoods of local communities, and leads to more stable and cooperative relationships with suppliers in high-risk regions. It is an approach that aligns with both the EUDR’s philosophy and broader corporate sustainability goals, giving businesses a dual advantage.

Strategic steps to take ahead of the delayed EUDR

To navigate the delayed implementation of the EUDR and leverage nature-based solutions, businesses should consider a strategic, multi-faceted approach:

• Accelerate supply chain audits. Use the additional time to conduct thorough audits of supply chains, identifying deforestation risks and establishing traceability mechanisms.
• Partner with Nature-Based Solution providers. Collaborate with companies like PUR that offer integrated solutions to deforestation challenges, including sustainable land management practices and ecosystem restoration via agroforestry, reforestation and conservation.
• Develop a clear compliance roadmap. Design a phased approach to EUDR compliance, ensuring that key milestones are met well before the regulation’s revised deadline.
• Bring stakeholders along too. Invest in training and educating supply chain partners on deforestation-free practices and the benefits of sustainability.

Be ready regardless

The 12-month delay in implementing the EUDR presents both challenges and opportunities for businesses. Companies already preparing for the 2024 rollout may face disruptions in investment planning, resource allocation, and operational changes. Such ambiguity may lead to cautious delays in adopting deforestation-free practices. Those that have not yet begun the process of preparing for the new law might well see the delay as an opportunity to catch up. But it’s important to understand the EUDR’s requirements will not change – and last-minute preparations can often lead to compliance risks and rushed decisions when the deadline eventually arrives.

Regardless of the EUDR delay, it pays to be ready anyway. After all, it is never too early to start building deforestation-free supply chains. The planet and its people demand it.