Europe postpones anti-deforestation law for a year

After repeated denials that it would not postpone the implementation of the new anti-deforestation regulation, the European Commission announced this Wednesday (2) that the EUDR, as it is known, will no longer come into force on December 30, 2024.

The new deadline, which will still depend on approval by the European Parliament, will be December 30, 2025 for large companies and June 30, 2026, for micro and small companies. The regulation establishes a series of audits and certifications to prove that products from the soy, meat, rubber, coffee, wood, cocoa and palm oil chains do not come from areas deforested after 2020, legally or not.

A study by the Ministry of Agriculture showed that 31.8% of Brazilian exports to Europe could be affected by the EUDR, which represents 14.7 billion dollars. At the beginning of the month, the Brazilian ministers of Agriculture and Foreign Affairs sent a joint letter to the European Union summit asking the bloc to postpone the regulation, classified as “unilateral and punitive”, which mainly harms small producers, in addition to ignoring Brazilian law about deforestation. In New York, during the UN assembly, the postponement was also requested by President Lula to the president of the European Commission, Ursula von der Leyen.

EUDR was criticized inside and outside Europe

The opposition movement to the EUDR was growing within the European bloc itself. German Chancellor Olaf Scholz called for the regulation to be suspended due to what would be “impractical requirements” and “drastic bureaucratic burden on companies”. The Italian government had also publicly spoken out against the new rules, stating that “the companies involved are not prepared to comply with the required traceability obligations”. The consequences could translate not only into “great economic difficulties, but also into a significant increase in the risk of food on the illegal market”.

When justifying the postponement of the EUDR, the European Commission stated that all implementation tools are technically ready. “The extra 12 months can serve as a gradual introduction period to ensure adequate and effective implementation”, says the note. “It is a balanced solution to support operators around the world in ensuring a smooth implementation, from the beginning”, reads another excerpt.

Brussels authorities emphasized that “the proposed extension does not in any way call into question the objectives or substance of the law.”

At the same time as postponing the EUDR, the European Commission published guidance documents to comply with the regulation’s requirements. The guidelines detail information system functionalities, updates on penalties and clarifications on critical definitions, such as “forest degradation”, “operator” within the scope of the law and “placement on the market”. An additional question and answer guide with 40 new items was also published.

Law could make soybean shipments unfeasible

The rigor of the European regulation, and the lack of clarification on the details of the new law, was keeping the Brazilian production sector up at night. Non-compliance with the rules provided for a fine of up to 4% of the companies’ annual net revenue. In the event of contamination, however minimal, an entire ship with soy could be forced to return to its port of origin.

“If they apply this 4% fine, if the audits are very rigorous, I’m sure that many exporters will no longer be interested in continuing to operate with Europe. Our profit margin for soybean oil is 2%. Imagine taking 4% of net annual revenue? Does this break the company”, Bernardo Pires, director of Sustainability at the Brazilian Association of Vegetable Oil Industries (Abiove), which brings together the main trading companies operating in the country, told Gazeta do Povo in an interview.

The relief of the productive sector with the postponement of the EUDR contrasts with the commitment of NGOs for its immediate implementation. Shortly after the Brazilian government sent a letter to Brussels asking for more time, the network of environmental NGOs gathered at the Climate Observatory sent another letter, taking the opposite position.

NGOs were against postponement

“It is unacceptable that, with the entire country on fire and on the threshold of COP30, Brazilian government authorities behave as spokespeople for part of a sector of the economy heavily involved in the loss of biodiversity and climate change to defend the EU from delaying the implementation of legislation, which, ultimately, harms Brazilian agribusiness itself”, stated the NGOs.

On the European side, the concern was economic and food security. The Association of Feed Manufacturers warned that EUDR requirements would cause a 5% to 10% increase in the prices of soy and derivatives, with an impact on other alternative sources of protein, reaching a cost of 2.25 billion euros in 2025 alone. Europe consumes 30 million tonnes of soy annually, but “there is no guarantee that there will be Eudr-compliant products to meet demand in 2025”, warned FEFAC.