Three months to EUDR – will there be a delay?

The European Deforestation Regulation (EUDR) has faced oppositions and challenges from food and beverage manufacturers, suppliers and affected nations since its June 2020 announcement. However, calls to delay and provide better stakeholder support have risen as the deadline countdown tightens.

Read more: European Commission floats 12-month EUDR delay

With criticism still rife, how ready is industry for EUDR? Will the deadline be delayed? And what are the biggest remaining challenges?

How ready is the food and beverage industry for EUDR?

“It depends on the industry and even the company,” environmental policy analyst and adviser, Duncan Brack, tells FoodNavigator.

However, there are differences between the preparedness of the affected commodities.

“In general, the cocoa, timber and palm oil sectors are probably better prepared," says Brack. "They’re all more heavily penetrated by certification systems, which aren’t by themselves the answer, but help. Rubber, cattle products and soy are much less well prepared. And coffee, I think, is somewhere in between. But within each sector, you’ll have a wide range of companies, from totally prepared already to largely not ready.”

This all begs the question, will the deadline be delayed to allow for all sectors to reach compliance?

Will the EUDR deadline be delayed?

While the EU's deforestation regulation has been supported, it has also faced mounting challenges for delay. Many argue suppliers and manufactures need more time to ready themselves for the huge piece of legislation.

Despites calls for a delay, which included the notable voice of German chancellor, Olaf Sholz, the EU has remained firm on the deadline. Though it’s worth highlighting the language used by the European Commission has been slightly ambiguous on the issue, with spokespeople refusing to answer the question with an absolute yes or no.

“The entry into force of the legislation has been set by the co-legislators and the commissioners who are doing everything they can to ensure things are in place on time,” said Tim McPhie, when addressing the European Commission last month.

This has led to speculation of whether the EU may be leaving a door open for a deadline extension.

“Increasingly I think it’s quite possible,” says Duncan Brack. “What form the delay could take is not known – it could be an extension to the transition period beyond the end of this year, but as I understand it, that might mean reopening the whole regulation to renegotiation, which the Commission (and plenty of companies, and NGOs) clearly don’t want - though some companies and trade associations that are calling for a delay probably do want to gut the whole system.”

There’s also speculation the EU may stick to the deadline but show comliance leniency during the initial months.

“It could possibly be an agreement with member state enforcement authorities not to prosecute any company that isn’t in full compliance for the first [few] years,” says Brack. “Actually, I think that’s what they’d do anyway, and this is what happened with the EU Timber Regulation ten years ago – there was no agreement to do so, it was just a sensible approach to enforcement – but in this case if they say that publicly it would help to defuse some of the tensions while avoiding opening the regulation to renegotiation.”

“I agree with Duncan's observations,” adds Kerstin Canby, senior director of the Forest Trends Association. “It’s unlikely EUDR competent authorities would be immediately ready or inclined to fine or prosecute companies.” In addition, today, many EUDR competent authorities are newly mandated. All will likely face challenges given the breadth of commodities they now need to oversee, which could overwhelm their capacity for immediate enforcement.”

While there has been widespread, and seemingly growing opposition to the deadline, there is also strong support – and not just from environmentalists, but from major manufacturers too. Nestle, Mars Wrigley and Ferrero recently came out in support of the regulation and the need to keep the deadline in place, throwing serious weight behind the argument to keep to the 30 December date.

"The EUDR represents an important step forward in driving the necessary transformation of the cocoa and chocolate sector, by helping to minimise the risk of deforestation associated with cocoa and chocolate products placed on the EU market," said the food and beverage giants in a joint paper shared with the European Commission.

Additionally, a delay to the regulation would be a complicated procedure making it something the EU would be keen to avoid.

“A formal delay would be very difficult to obtain as the EUDR has been formally adopted and does not provide the possibility for the Commission to extend/postpone the deadline for its implementation,” Thomas Delille, partner for Squire Patton Boggs LLP, told FoodNavigator. “This would require going through a legislative process that would involve all EU institutions and would be likely not possible to achieve within the remaining three months (if an agreement is at all reachable within the institutions).”

Though it’s possible the EU is already working on changes behind the scenes.

“Given the growing pressure the Commission might be working on means to ensure a transitional implementation of the EUDR,” adds Delille.

What are the biggest challenges facing manufacturers and suppliers?

The magnitude of the European Deforestation Regulation means that it has created many and varied challenges for all stakeholders, from farmers to retailers.

Stakeholders are also struggling with a lack of information and guidance from the European Commission.

“The biggest problem at the moment is that the Commission has not been able to release detailed guidance on a range of topics, and the third version of their FAQ documents, though this has been promised since before the summer,” says Duncan Brack. “It appears to be held up in the Commission President’s office – Ursula von der Leyen – and no one seems to be sure why.”

This lack of information is leaving suppliers and manufacturers unsure of exactly what systems should be implemented.  

“Without the clarifications and guidance expected in these documents – a leaked version was available in May, so we have a reasonably good idea what’s in it, though from what the Commission said this morning in the multi-stakeholder platform meeting, they’ve added other things too – companies are finding it difficult to ensure the right systems are in place,” adds Brack.

The EU has also been roundly criticised for its lack of support to stakeholders. EUDR is a substantial piece of legislation and so the support it provides to those affected should be equally significant.

“Despite an affirmed willingness of EU authorities to support operators subject to EUDR obligations, the support given so far is too slow and insufficient,” says Squire Patton Boggs’ Delille. “It is urgent that authorities provide the necessary guidance for the implementation of the EUDR. Also, there is a need to assess the relevance of the existing list of concerned products in Annex I, to ensure that products not in that list, but manufactured outside the EU with and/or on the basis of listed relevant products, are not penalising companies manufacturing in Europe by also using listed products.”

All this makes it clear there is still a huge amount of uncertainty surrounding the European Deforestation Regulation, and the next three months will be crucial.

Read more: the latest information on EUDR