Last month, the European Commission proposed delaying the application of the Deforestation-free products Regulation ((EU) 2023/1115).  It had been due to apply from 30 December, but the Commission has decided to delay it to 30 December 2025 for large companies and 30 June 2026 for micro- and small enterprises. The rationale behind the postponement was to ensure legal certainty for all stakeholders. 

The Regulation imposes mandatory supply chain due diligence requirements on companies placing relevant commodities (cattle, cocoa, coffee, oil palm, rubber, soya and wood) and related products on the EU market. It prohibits those commodities and products from the EU market unless they are deforestation-free, have been legally produced and are covered by a due diligence statement.

The Commission has published guidance to support companies and enforcing authorities to comply with, and apply, the Regulation. The guidance includes:

• Information on the functionality of the Information System (which shall contain the due diligence statements), which is accepting registrations and will be fully operational in December 2024.
• Key definitions, including "forest degradation", "operator and "placing on the market".
• Traceability obligations.
• Penalties for non-compliance will be set out under national law, but penalties may include fines of at least 4% of EU turnover, confiscation of the covered products or of the revenues gained from those products and, for serious or repeated infringements, a temporary prohibition from dealing in the EU in those products.

The Commission has also published a frequently asked questions document, guidance on the simplified regime for micro- and small companies, and the principles of its methodology for benchmarking and classifying countries as low, standard or high risk. The Commission will propose an implementing act for the country benchmarking system by 30 June 2025.

The European Parliament has agreed to the postponements proposed by the Commission. It also adopted other amendments, including the creation of a new category of countries posing “no risk” on deforestation in addition to the existing three categories of “low”, “standard” and “high” risk. Countries classified as “no risk” will be those with stable or increasing forest area development and would face significantly less stringent requirements. The Commission will have to finalise a country benchmarking system by 30 June 2025.

For these changes to enter into force, the agreed text will have to be endorsed by both Council and Parliament and published in the EU Official Journal before 30 December 2024.