The European Commission has published updated guidance on the EU Deforestation Regulation, providing clarifications on key concepts such as "negligible risk", due diligence obligations, and the scope of relevant products.
The Deforestation Regulation, adopted in May 2013, aims to curb global deforestation and forest degradation linked to European consumption. Initially set to apply from December 2024 but postponed by one year, the Deforestation Regulation requires companies placing certain commodities — such as cattle, cocoa, coffee, palm oil, soy, rubber, and wood — on the Union market or exporting them from it to prove their products are deforestation-free and legally produced. The Regulation introduces mandatory due diligence, data collection, and reporting obligations, for operators and traders who make available on or export from the Union market covered commodities and their derived products.
The newly issued guidance serves as a practical reference for stakeholders, and we summarize its key points below.
- Definitions of Operators and Service Providers
- Operators: When a domestic product is placed on the market, the operator is usually the person that owns the commodity/product at the point of sale. However, this may vary depending on the specific circumstances of the contractual agreement. Under the updated guidance, if a person enters a contract authorizing another party to produce a relevant commodity, the producer will be considered the operator only if ownership of the product passes to them automatically upon production (e.g., by the harvesting of the trees or upon birth of the calf). By contrast, if national law or the contract foresees that ownership is transferred after production, the producer is not regarded as the operator.
- Service providers: According to the guidance 'service providers' who offer logistical or technical support services (e.g., freight forwarders, shipping agents, or customs representatives) and who do not possess ownership or similar rights over the products they handle, are neither 'operators' nor 'traders' for the purpose of the Regulation if they do not place or make available products on the market or export.
2. Negligible Risk
- The new guidance clarifies that SME and non-SME operators sourcing from low-risk countries are not required to fulfil the obligations under Articles 10 and 11 (risk assessment and mitigation) to achieve negligible risk.
- The guidance adds that it is not sufficient to simply ensure
that the goods were produced in low-risk territories. Operators
must also:
- Assess the complexity of the relevant supply chain and the risk of circumvention or mixing with products of unknown origin.
- Ascertain that all relevant commodities and products they place on the market or export have been produced exclusively in such countries or parts thereof that were classified as low risk in accordance with Article 29.
- According to the guidance, it is generally sufficient that the information collected is independently verifiable and conclusive. The operator can do that, for instance, by ensuring that the product-related information is internally consistent. No further steps of assessing the information are required unless, in the course of information collection or in the course of the assessment required by Article 13 of the Deforestation Regulation (which provides for simplified due diligence), operators are made aware of relevant new information indicating that a relevant product that they intend to place on the market or export is at risk of not complying with the Regulation.
3. Due-diligence — Legality
The updated guidance adds voluntary self-declarations of producers of relevant commodities as useful supporting documents for demonstrating compliance with the legislation of the country of production.
4. Product Scope: Packing Materials
- The guidance adds a distinction between:
- Packing that gives the product its essential character — containers with an 'essential character' are assigned their own HS code, classified independently from the product they contain, and are in scope of the Regulation.
- Packing shaped and fitted for a specific product — assigned the HS code of the product they contain, if suitable for long-term use, presented with the articles for which they are intended, and normally sold therewith. Those products are not in scope of the Regulation (General Rule 5a).
- Ordinary packaging materials or containers presented with goods are classified with the goods if normally used for packaging and are not in scope (General Rule 5b).
- Paper or other wrapping materials are considered integral to a product if their purpose is to protect, carry, or transport it.
5. Product Scope: Waste, Recovery, and Recycled Products
- The guidance explicitly covers "recycled products", whereas the previous version only covered waste and recovery.
- Clarifications include:
- Recovered/recycled materials made entirely from recycled content are not subject to the Regulation.
- Any non-recycled or non-recovered material remains in scope, e.g., virgin pulp in paper production or timber used to repair pallets.
- Fuel pellets made entirely from waste are exempt.
- Clarifications on non-relevant commodities:
- Palm oil from Elaeis spp. is in scope, while babassu oil from Attalea spp. and other palm species are not.
- Wood products are in scope, while rattan, bamboo, and other materials of woody nature are not.
6. Composite products
- When dealing with composite products (which contain multiple relevant products under different commodities), the operator placing the product on the market or export it will only be required to conduct due diligence on the relevant products listed under the relevant commodities in Annex I.
- On the due diligence for composite products, more specifically on the possibility of referring to an existing due diligence statement when submitting to the Information System, the new guidance explicitly refers to this possibility for non-SME operators. In this manner, the guidance clarifies that this possibility applies to both SME and non-SME operators.
7. Date of Effect and Applicability
The guidance provides updated tables summarizing the legislative timelines for products within scope, including cattle, cocoa, coffee, oil palm, rubber, soya, and wood. Key dates remain 30 December 2025 for large and medium operators, and 30 June 2026 for micro and small operators.
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.
