Deforestation Regulation: Simplifying Compliance

The looming compliance date for the EU Deforestation Regulation is a concern for many companies. However, the European Commission is taking action to try to simplify compliance. It has recently published updated guidance and adopted measures to assist companies. Our Planning & Environment team reviews these developments.

What you need to know

‘Operators’ and ‘traders’ must begin to comply with the EU Deforestation Regulation (EUDR) from 30 December 2025 and from 30 June 2026 for small and medium enterprises (SMEs). The European Commission has taken five key steps to try to simplify compliance:

1. It has removed the need to carry out risk assessments for goods from “low-risk” countries
2. It has published a list of low-risk countries
3. It is developing an online “Information System”, similar to the EU food safety TRACES software, to facilitate compliance and enforcement
4. It has published updated guidance on how to comply with the EUDR
5. It is working on secondary legislation aimed at reducing the administrative burden of compliance

Due diligence obligations under the EUDR are looming for companies trading in the seven relevant commodities[1] and related products[2] (together, Relevant Goods). See our previous articles which reviewed those obligations and the related stakeholders’ concerns.

To recap, the EUDR essentially provides that Relevant Goods cannot be imported or exported to/from the EU unless the following conditions are met:

• They are deforestation-free
• They have been produced in accordance with the relevant national legislation of the country of production, and
• They are covered by a due diligence statement (DDS)

In response to stakeholders’ concerns, the EU agreed to delay commencement of the obligations by one year, to 30 December 2025 and to 30 June 2026 for SMEs. Since then, the European Commission has been busy trying to simplify the obligations and publish clearer guidance.

The Irish Government is also currently drafting Irish legislation to implement the EUDR in Irish law.

Simplified due diligence for low-risk countries

A major concern was that risk assessment and due diligence obligations would impose major administrative burdens on companies. To ease this burden, the EUDR has been amended to remove the obligation to carry out detailed risk assessments for Relevant Goods from low-risk countries.[3]

Broadly speaking, low-risk countries are those that:

• Have low rates of deforestation
• Have low rates of forest degradation, and
• Demonstrate a strong track record on human rights and other societal standards.

It is important to clarify that this exemption does not waive the obligation to conduct due diligence.

Companies will still need to:

• Collect the required information
• Assess the complexity of the supply chain
• Consider the risk of efforts to work around the regulation, and
• Review the risk of mixing with products that are not low risk

The operator will also need to submit DDS for Relevant Goods from low-risk countries.

Country benchmarking system

To identify low-risk countries, the Commission published a strategic framework document.[4] This document sets out a benchmarking system for rating the risk-level of individual countries. The Commission has been engaging with Member States and third countries on how to implement the EUDR and has now published a list of low and high-risk countries.[5]

Information system

Another key stakeholder concern was that there is no system for companies to submit DDS. The Commission is now setting up an online database known as the “Information System”.[6] This will be largely based on the TRACES system currently used in the food safety industry.

The Information System will be a central database where companies can upload DDS for review by other companies, national authorities, and the Commission. Once uploaded, a unique identification number for each DDS will be issued. Each DDS will be subject to an automated compliance assessment.

To ensure companies are in a position to comply with the EUDR from 30 December 2025, it is anticipated that companies will be able to upload DDS to the Information System before the compliance deadline.

Updated guidance

The Commission has published updated guidance on how to comply with the EUDR.[7] The guidance addresses issues such as:

• Large companies can reuse existing DDS when Relevant Goods that were previously on the EU market are re-imported.
• An authorised representative can submit DDS on behalf of members of company groups.
• Companies will be allowed to submit DDS annually instead of for every shipment or batch of Relevant Goods placed on the EU market.
• For large companies that are downstream in the supply chain, there is an obligation to ‘ascertain’ that upstream companies have carried out due diligence. This can be done by collecting their unique DDS reference numbers, which are generated by the Information System.
• Clarity around the meaning of the term “agricultural use”. Understanding the meaning of this term is key to identifying whether certain land has been deforested for agricultural use to produce Relevant Goods. If it has, then those goods cannot be imported or exported to/from the EU.
• The guidance provides sample scenarios to identify where a company may have operator and/or trader due diligence obligations. This is based on the concepts of ‘placing on the market’ and ‘making available on the market’.

Draft secondary legislation

The Commission has also published draft secondary legislation aimed at simplifying due diligence obligations.[8] It is currently going through the EU’s legislative process. If adopted in its current form, it will amend the EUDR by:

• Clarifying that ‘wood’ does not include “bamboo, rattan and other materials of woody nature”.
• Amending the list of certain Relevant Products made from cocoa, palm oil, rubber, and wood. This is to allow for the fact that some of these products can be manufactured from out-of-scope commodities. The EUDR only applies to those products if they are produced using a Relevant Commodity. This will be denoted by the addition of “ex” in front of the relevant product code in Annex I to the EUDR.
• Exempting certain packaging and other materials from the scope of the EUDR.
• Clarifying that waste, second-hand, and used products do not fall within the scope of the EUDR. This is to avoid discouraging circular and resource efficient practices.

Next steps

The European Commission has taken significant steps to assist companies with complying with the EUDR from 30 December 2025 and from 30 June 2026 for SMEs. The updated measures are intended to:

• Lessen the regulatory burden by reducing the scope of obligations for Relevant Goods sourced from low-risk countries
• Reduce the number of DDS that companies must file, and
• Provide further guidance and IT infrastructure to facilitate compliance.

Given industry’s concerns regarding the complexity and scope of the obligations, it is expected that the changes will be well received by operators and traders.

For more information, please contact a member of our Planning & Environment team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1] Wood, cattle, rubber, oil palm, soya, cocoa, and coffee.

[2] Products made from or fed with any of the seven commodities, as set out in Annex I to the EUDR

[3] Amending Regulation (EU) 2024/3234

[4] Communication C/2024/6604

[5] Communication C(2025) 3279 final

[6] Regulation (EU) 2024/3084

[7] Communication C/2024/6789

[8] Draft delegated regulation – Ares (2025) 3099313