EU agrees deforestation regulation delay as review clause leaves industry in compliance limbo

The European Council and Parliament have reached a provisional agreement on a one-year postponement of the EU Deforestation Regulation (EUDR), but a mandated simplification review before the new deadline creates fresh uncertainty for F&B supply chains already navigating the balance between compliance costs and competitive advantage. 

Under the December 4 agreement, the EUDR will apply from December 30, 2026, for large operators, with micro and small businesses receiving until June 30, 2027. However, the deal includes a simplification review requiring the European Commission to assess the regulation’s impact by April 30, 2026 — eight months before large companies must comply.

This review could trigger further legislative changes, leaving F&B companies uncertain whether to invest in compliance systems for rules that may change again, even as consumer demand for verified sustainability claims creates commercial incentives for early adoption.

“It is now crucial that the European Parliament and Council swiftly adopt the deal to ensure the new timeline enters into force in time to avoid further legal uncertainty,” says COCERAL, FEDIOL, and FEFAC in a joint statement. The three trade bodies, representing EU cereals, vegetable oils, and feed industries, welcomed the postponement, but stressed the need for “implementation simplification.”

The agreement resolves a political process that began with the commission’s October proposal, followed by the council’s negotiating mandate in November and Parliament’s backing on November 26. The provisional text must now be formally adopted, expected between December 16-18.

Administrative simplifications agreed

The deal retained measures aimed at reducing compliance burdens. Only the operator who first places an EUDR-relevant commodity on the market will file a due diligence statement. Downstream operators — such as chocolate manufacturers using imported cocoa — will no longer submit separate statements.

Only the first downstream operator must collect and retain the reference number from the initial due diligence statement. Micro and small primary operators will submit a simplified one-off declaration. The agreement also removed printed books, newspapers, and pictures from the regulation’s scope.The EUDR targets seven deforestation-risk commodities including cocoa, coffee, soy and palm oil.

Environmental groups speak out 

The mandated simplification review has drawn criticism from environmental organizations, who argue it creates uncertainty for a regulation not yet implemented.

“Worryingly, parliament has asked the EU Commission to undertake a ‘simplification review’ of the law and come back with a report by April 2026,” says Fyfe Strachan, policy and communications lead at Earthsight, an environmental NGO focused on supply chain accountability. “This report could trigger another round of amendments, compounding the legal uncertainty.”

Anke Schulmeister-Oldenhove, policy manager for forests at WWF European Policy Office, describes the situation as chaotic. “What started as an IT issue has morphed into a chaotic and unmanageable situation,” she says. “The European Commission must urgently clean up this mess and take back control.”

MEP Christine Schneider, parliament’s lead negotiator, defends the approach, stating the agreement “takes the concerns of farmers, foresters and businesses seriously and ensures the regulation can be implemented in a practical and workable way.’

F&B sourcing implications

For F&B companies sourcing ingredients like cocoa, coffee, soy, and palm oil, the delay creates a split-timeline challenge. Companies must continue supply chain mapping and due diligence preparations for December 2026 compliance, while recognizing that the April 2026 review could alter requirements mid-preparation.

However, EUDR compliance may offer commercial advantages beyond regulatory obligation. 

According to Innova Market Insights, one in three consumers is willing to pay more for chocolate with verified sustainability claims, positioning deforestation-free sourcing as a potential competitive differentiator rather than purely a compliance cost.

The council cited “concerns from member states and stakeholders about the readiness of companies and administrations, as well as technical issues related to the new information system.”

COCERAL, FEDIOL, and FEFAC call for “commodity and supply chain-specific solutions to enable broad participation by supply chain actors in EUDR-compliant supply chains,” emphasizing that harmonized guidance across member states remains essential.

The regulation, which entered into force in June 2023, requires companies to prove that cattle, wood, cocoa, soy, palm oil, coffee, and rubber products have not originated from land deforested after December 31, 2020. This latest development marks the regulation’s second postponement.