1 year extra to prepare and fine-tune your company for the EU Deforestation Regulation
1 year extra to prepare and fine-tune your company for the EU Deforestation Regulation
Discover how BDO can help you with your due diligence systems
The EU has reached an agreement to postpone the application of its ambitious deforestation regulation by an additional year, moving the date to December 30, 2025.This provisional agreement was reached between the Council and the European Parliament, focusing on ensuring a smooth transition and adequate preparation for all stakeholders involved. It now needs to be endorsed before it can be officially adopted and published in the Official Journal of the EU.
Combat global deforestation and forest degradation
Originally set to be applied as of December 30, 2024, the deforestation regulation has been designed to combat global deforestation and forest degradation by monitoring and controlling the entry into and export from the EU market of commodities like:
- cattle
- wood
- cocoa
- soy
- palm oil
- coffee
- rubber
Why is the delay provided?
It will provide member states, third-country exporters, operators, and traders additional time to establish and fine-tune their due diligence systems, ensuring compliance with the EU’s stringent standards.
Core substance of the regulation remains unchanged
Despite the postponement and other proposed amendments, the core substance of the regulation remains unchanged. The objective continues to be the safeguarding of global forests by preventing products linked to deforestation and forest degradation from entering the EU supply chain. This measure not only addresses environmental concerns but also promotes sustainable trade practices.
How businesses benefit from the delay
Extended Preparation Time: Businesses now have an extra year to develop and refine their due diligence processes. This means companies can more thoroughly assess their supply chains, implement necessary changes, and ensure all aspects of their operations meet the EU’s stringent deforestation-free criteria. Nevertheless, it is important to start preparing now.Enhanced Legal and Operational Certainty: With the additional preparation time, companies can avoid the risks associated with non-compliance, such as legal penalties and reputational damage. The delay also provides a clearer roadmap for businesses to plan and execute necessary adjustments in their supply chain management.
Opportunity for Strategic Planning: Companies can use the extra time to innovate and potentially restructure their supply chains for greater efficiency and sustainability. This could involve exploring new sourcing strategies or investing in technologies that enhance traceability and transparency.
Cost Management: Gradually adapting to the new regulations allows businesses to spread out the financial impact of these changes. This strategic approach to compliance can help manage costs more effectively, avoiding a last-minute rush that could lead to higher expenses.
How can BDO help you?
Do you have any questions on the implementation of the EU Deforestation Regulation in your company? Do you need advice in order to establish and fine-tune the due diligence systems in your company and ensure they are compliant with the EU’s stringent standards?Then, don’t hesitate to contact our BDO Legal, Customs and ESG team experts: Leen Lefevere and Katrien Kegels.