Regulation (EU) 2023/1115, better known as EUDR (European Union Deforestation Regulation), is the tool developed by the European Union to counter global forest degradation and, in particular, the so-called “embedded deforestation”, namely that caused mainly by the import of primary goods, including cocoa, coffee, beef, soy, palm oil, wood and rubber.

The regulation requires companies to digitally map their supply chains, tracing them back to the plot of land where the imported raw materials were grown, verifying that no land deforested after 2020 was used for their production, or that no forests were altered unsustainably. The marketing of products that are not “zero deforestation” is therefore prohibited, with the aim of safeguarding the ecological value of forest ecosystems in producing countries, mainly located in tropical areas.

The EUDR's journey in the European Union

The EUDR Regulation became effective on 29 June 2023, but due to the complexity of the changes introduced, in December 2024 the application date of the new regulation was postponed by one year through Regulation (EU) 2024/3234: the official date is currently 30 December 2025, with a further six-month postponement (30 June 2026) for operators established as micro or small enterprises on 31 December 2020, excluding products listed in the Annex to Regulation (EU) No 995/2010 - EUTR.

However, the European Commission has recently put forward proposals to amend this roadmap. On 23 September, an initial blanket postponement of a further 12 months was suggested, due to an IT system that was “not adequate” to support the new regime, while on Tuesday 21 October a new request was made, modifying the procedures and timetable.

The latest rumours suggest that there is broad consensus among EU Member States that the European Regulation on Deforestation should not be implemented at the end of the year. According to reports, many Member States have also requested a further postponement and a potential simplification that goes beyond the Commission's proposal.

Other member states have emphasised that they can only support the Commission's proposal and not further simplification. From what emerged at today's meeting of member state ambassadors on 29 October, in conclusion, the majority of delegations do not want the EUDR, in its current form, to come into force by the end of the year. The matter will now be discussed by the European Parliament and the Council of the EU: if approved, it will be formally adopted; if not, the EUDR will remain in force in its current form.

It will be difficult to know the outcome of this process before mid-December. This time-frame is causing difficulties for the business world, as FederlegnoArredo points out: “The succession of often contradictory announcements is perpetuating a situation of uncertainty and therefore complexity for companies. The extremely tight deadlines for the adoption of this new proposal risk compromising the viability of the practical application of the Regulation, while placing European operators in an unbearable position of legal and operational uncertainty.”

Deferral (only for SMEs) and simplification

According to the new proposal, for medium and large enterprises, the deadline for the EUDR to become effective remains 30 December 2025 (no one-year postponement, as hypothesised in September), but a six-month grace period is introduced.

The date is postponed to 30 December 2026 (i.e. an additional six months) for micro and small enterprises. This will hopefully enable the IT system to cope with the expected workload, managing all the due diligence declarations that will be received.

To this end, the EU Commission plans to simplify the obligations for certain actors in the supply chain. European retailers and large manufacturing companies, which are at the downstream end of the value chain, will no longer be required to submit due diligence declarations. The requirements will focus on upstream operators, that first place products on the market. New developments are also planned for micro and small primary operators from low-risk countries, only required to submit a one-off declaration in the EUDR IT system.

The current debate

The EUDR has been at the heart of the debate in Europe for many months. On one side, environmental organisations are pushing for its timely implementation, fearing pressure from trading partners such as the United States, which a few months ago requested an exemption for its products. On the other, industry is asking for time to ensure proper implementation: the various agro-industrial sectors will have to develop new procedures and traceability systems that meet the objectives set out in the Regulation, but also prevent an increase in bureaucratic burdens.

“Sustainability is an essential priority for our supply chain, and its implementation cannot be separated from clear and realistically enforceable regulations,” explained FederlegnoArredo and Confagricoltura at a joint meeting at the European Parliament last September. The ideas suggested on that occasion included reducing the burden on SMEs, focusing due diligence obligations on primary operators, strengthening the information system and ensuring a more realistic risk classification.

“The changes proposed by the European Commission on Tuesday 21 October are substantial and deserve to be analysed and discussed by stakeholders, policymakers and Member States,” continues FederlegnoArredo. “This is extremely difficult considering the current deadline of 30 December 2025. It is objectively unrealistic to expect companies to be ready to comply straight away with a regulation that has been hastily renegotiated just two months before it comes into force.”

An appeal to “stop the clock”

The federation representing Italian entrepreneurs in the wood and furniture sector concurs with the position expressed by European federations in the sector in an open letter addressed to the EU, detailing numerous difficulties. As stated in the document, the proposal does not reflect the “operational reality of the market”, in which medium and large enterprises regularly interact with small and micro-enterprises within integrated supply chains. “Consequently, setting different application dates – with large and medium-sized enterprises required to comply as of 30 December 2025 and small and micro-enterprises benefiting from an additional twelve months – will in practice force all operators to comply from the same date. The interdependence of businesses within the value chain makes the proposed postponement illusory, as smaller operators will be required to align themselves immediately in order to maintain commercial relationships.”

The European Commission is then “urged to introduce a stop-the-clock arrangement, allowing policymakers to carry out a proper and comprehensive assessment of the impact and implementation of the Regulation. This reassessment should strive to identify genuine simplification measures and make the EUDR's obligations truly practicable, at the same time preserving the regulation's legitimate environmental objective of combating deforestation, a goal strongly supported by the signatories of this statement.”

Costs for SMEs

As far as wood and wood products are concerned, the EUDR will replace the EUTR, the so-called Timber Regulation (995/2010), which for years already prohibited illegal wood and wood products from being placed on the EU market. “We cannot lose competitiveness, especially in relation to non-EU markets, which operate in the complete absence of rules. One of the consequences is the risk of production activities being relocated to these countries, distorting a supply chain that boasts genuine Made in Italy production,” explains Claudio Feltrin, president of FederlegnoArredo.

SMEs represent the majority of Italian and European agroforestry activities: the goal is to reduce the administrative burden on these businesses by 35%, as indicated in the Compass for European Competitiveness.

Estimates previously released by the European Commission estimate that the annual costs of compliance with the EUDR for operators would range from €175 million to €2.6 billion. According to projections made by small-scale forestry cooperatives, the one-off costs of complying with the new Regulation would amount to around 20% of their turnover, while annual operating costs would exceed 5%. These percentages are likely to force most small businesses out of the market.

The debate at Ecomondo

Given the complexity of the scenario, it is essential to provide opportunities for dialogue where information can be shared and the most critical aspects relating to the implementation of the new procedures can be discussed. This will ensure a balance between the legitimate objectives of environmental protection and climate mitigation and those of supplying primary goods to strategic supply chains for Italian manufacturing.

This is what will be discussed at Ecomondo, the event dedicated to the circular economy scheduled from 4 to 7 November in Rimini, during the meeting entitled Ecological transition, forests and agro-industrial supply chains: the implementation of the deforestation regulation (EUDR), held by the Ecomondo & Confagricoltura Technical Scientific Committee, in collaboration with Fondazione AlberItalia and Cluster Italia foresta legno (RiminiFiera, Agorà Augusto - Bioeconomy Area Hall D1, from 10:00 to 11:00). Among the scheduled speakers is Claudio Feltrin, president of FederlegnoArredo, who will participate in the round table discussion entitled How to meet the new requirements? A comparison of supply chains.

Cover: photo Envato