If you have been looking at processes to review your supply chains to comply with the Deforestation‑free Products Regulation ((EU) 2023/1115), it looks like there might be another delay on the cards.
Last week, the European Commission signaled a further delay to its application, following the existing delay agreed last year.
In a letter to the Parliament and Council, the Commission indicated that its central information system for due diligence statements is unlikely to cope with expected transaction volumes, risking slowdowns and outages that would prevent operators from complying with the upcoming regulation. A "stop‑the‑clock" proposal for a one‑year extension is expected shortly.
If the proposal is accepted, the new timeline would delay enforceability of the Regulation to 30 December 2026 for large companies and 30 June 2027 for micro‑ and small enterprises (a 12‑month shift from the currently planned dates). As with the previous deferral, any amendment will require approval by both Council and Parliament.
Key requirements of the Regulation
The Regulation mandates supply chain due diligence for cattle, cocoa, coffee, palm oil, rubber, soya, wood and its derived products (such as leather or chocolate). Products may only be placed on the EU market if they are deforestation‑free, produced legally and covered by a due diligence statement submitted via the EU information system.
Penalties are to be set at national level but may include fines of at least 4% of EU turnover, confiscation of products or revenues and, for serious or repeated infringements, temporary prohibitions on dealing in the commodities covered by the Regulation.
Ongoing implementation work
In the lead up to the currently planned application dates (30 December 2025 for large companies and 30 June 2026 for micro- and small enterprises), various steps have been taken to gear up implementation for stakeholders:
- the Commission has published FAQs and guidance clarifying key definitions (including operator, placing on the market and export), due diligence concepts such as "negligible risk" and supply‑chain complexity, and product scope (including packaging, waste and recycled products);
- registration for the IT systems has been open for suppliers; and
- discussions on country benchmarking and risk categorisations have continued between the Commission and Parliament.
Member States, countries who are major suppliers of the commodities in scope and industry groups have pressed for further simplification and a longer implementation period, talking about feasibility and traceability concerns. In parallel, under the recent US‑EU trade framework, the EU has also committed to work to address US stakeholders' concerns about the Regulation's impact on trade in commodities deemed to pose negligible deforestation risk in the US.
What businesses should do now
- Continue getting ready: map supply chains, collect geolocation data, assess risk, and prepare due diligence statements;
- Engage with the EU system: register and test internal processes against the current interface where possible;
- Prioritise higher‑risk supply chains and third‑country exposures in line with your risk assessment;
- Monitor developments: watch for the Commission's formal proposal, approval by Council and Parliament, and any further guidance or adjustments to risk classifications and simplified regimes; and
- Track national enforcement: keep abreast of Member State penalty frameworks and enforcement preparations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
