Thought Leadership feature, sustainability expert Pia Pinkawa explains the potential delay of the EU Deforestation Regulation (EUDR) and what it means for global businesses.

The European Union Regulation on deforestation-free products (EUDR) has been widely regarded as a landmark piece of legislation, set to reshape global supply chains by enforcing strict due diligence on commodities linked to deforestation. Its objective is clear: reduce the EU’s global footprint, promote sustainable production, and ensure that European markets no longer drive forest loss.

But as of late September 2025, the European Commission has signaled that it may postpone the EUDR’s entry into force by another 12 months, moving the effective date from December 2025 to December 2026. The Commission cites serious concerns about the readiness and capacity of the central information system that would process operator registrations and due-diligence statements; in its current form, it could slow to “unacceptable levels” and disrupt trade flows and compliance activities.

For businesses, especially in agriculture, F&B, and manufacturing, the news lands with mixed emotions. On the one hand, it relieves immediate pressure. On the other hand, it deepens uncertainty.

The Double-Edged Sword of Delay

For companies that have already invested heavily in compliance systems, supplier mapping, and due diligence processes, a postponement can feel like moving the goalposts. Investments in data platforms, certification schemes, and supplier training were made based on a clear timeline. A sudden shift undermines internal momentum for sustainability projects and makes it harder for procurement leaders to justify budgets in boardrooms already stretched by inflation, supply chain disruptions, and geopolitical volatility.

At the same time, a delay could provide valuable breathing space for businesses that are lagging behind. Many smaller operators and downstream companies have struggled to interpret the requirements, align with suppliers outside the EU, or simply manage the administrative load that the EUDR entails. For them, an additional year offers a lifeline to prepare more thoroughly.

A Question of Trust and Credibility

Not everyone buys the Commission’s reasoning. Heidi Hautala, former Vice-President of the European Parliament, has sharply criticized the move on LinkedIn, warning that repeated changes risk eroding trust in EU law-making and disregarding investments already made by companies and producer countries. Her critique taps into a broader concern: if sustainability rules are repeatedly revised, their deterrent power weakens, and businesses may revert to short-term cost control rather than building long-term resilience.

Lobbying for a Longer Transition Period

Alongside the European Commission’s internal concerns about the central IT system and enforcement feasibility, there has been mounting pressure from several member states, industry associations, and producer countries to extend the EUDR timeline or soften its scope. Their lobbying efforts highlight not only technical readiness but also trade and development challenges.

Member State Pressure: Governments such as Austria, Italy, and Poland have urged the Commission to delay enforcement, citing risks of disproportionate burden on small and medium enterprises (SMEs) and possible trade disruptions with key suppliers. In the EU Agriculture and Fisheries Council, several ministers argued that businesses need more time to map supply chains and collect geolocation data, especially for commodities like cocoa, coffee, and palm oil.
Industry Lobbying: Associations have consistently warned that the regulation’s deadlines are unworkable without clearer guidance and functioning IT tools. They argue that regulatory uncertainty risks market distortions and may drive some operators out of business.
Producer Country Pushback: Countries supplying high-risk commodities, including Brazil, Indonesia, and Côte d’Ivoire, have already back in 2023 criticized the EUDR as a potential trade barrier. They contend the rules unfairly shift compliance costs to producers and undermine local certification efforts. Several have threatened to escalate the matter through the World Trade Organization.
Corporate Advocacy: Large multinationals, particularly in retail and food production, have lobbied for phased-in implementation. While companies like Nestlé and Mondelēz both claimed to fully support the EUDR’s objectives, Mondelēz communicated the need to delay it for another 12 months to avoid supply bottlenecks and ensure smallholders are well prepared to not get excluded from global supply chains otherwise.

The net result is a policy tug-of-war: while civil society groups (WWF, Greenpeace, ClientEarth) demand strict enforcement without delay, industry and some member states push to defer obligations beyond December 2026. The Commission has not yet confirmed whether these pressures will lead to a formal extension, but the debate is intensifying as the official enforcement date approaches.

Why EU Imports Matter in the Fight Against Deforestation

The Commission itself recognizes that EU consumption is a driver: the EU “contributes” to deforestation by importing products linked to forest loss, and therefore has a responsibility to help end it (European Commission). The EUDR was designed to reduce the footprint of EU consumption, redirect finance, and strengthen information on commodity supply chains—exactly the levers companies are now configuring. A delay, even for technical reasons, risks prolonging a status quo in which products associated with deforestation can still enter the market without uniform due-diligence checks.

The Real-World Impacts of Deforestation (and Why They’re Business Risks)

Deforestation is a material climate risk: tropical forest loss in 2023 totaled about 3.7 million hectares, roughly ten football fields per minute, and accounted for around 6% of global CO₂ emissions that year. While estimates vary by method and period (some earlier assessments put deforestation’s share of anthropogenic CO₂ at roughly 12% (Global Carbon Project), the direction of travel is unequivocal. Losing forests accelerates warming and increases transition and physical risks across portfolios and supply chains.

The ripple effects extend beyond carbon. Forest loss disrupts water cycles and rainfall, increases run-off and flooding, degrades soils through erosion, and destroys habitats, with forests hosting an estimated 70% of terrestrial biodiversity. These impacts translate into agricultural volatility, raw-material scarcity, reputational exposure, and higher operating costs, exactly the issues procurement and sustainability teams are tasked to manage.

What Business Should Do Now

The temptation in times of uncertainty is to slow down. But the strategic risk of waiting is high. Even if the EUDR’s timeline shifts, its direction will not. Supply-chain transparency, traceability, and deforestation-free sourcing are structural trends driven by regulation, markets, and consumer expectations alike.

Companies can act decisively by:

Prioritizing dual-use capabilities: Build visibility and traceability tools that serve compliance and reduce procurement risk (e.g., geospatial verification, supplier onboarding, and grievance mechanisms).
Deepening supplier partnerships: Use extra time to support smallholders and high-risk suppliers with training and data collection so they’re genuinely ready when enforcement begins.
Aligning regulatory workflows: Integrate EUDR readiness with CSRD and CSDDD to avoid silos and create consistent data pipelines across ESG topics.
Stress-testing scenarios: Model cost, lead-time, and sourcing impacts under different enforcement dates and risk classifications to keep capital allocation defensible.

Conclusion: The Cost of Waiting

The potential delay of the EUDR highlights a recurring challenge in sustainability regulation: balancing ambition with operational reality. Technical readiness matters. But prolonged uncertainty risks weakening the urgency of action at a time when forests continue to disappear and climate risks compound. For businesses, the message should be clear: a shifting timeline does not change the destination. Companies that maintain course, embedding transparency, investing in data, and building resilient supply chains, will be better positioned when the EUDR finally takes effect. And when it does, those who acted early will have turned compliance into competitive advantage.

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