EU Expands Deforestation Law Scope, Promises Simpler Compliance
The European Commission proposes expanding its deforestation law to new products and easing company compliance.
Why it matters: Legal teams at global corporations face broader due diligence risks as the EU deforestation law widens its scope. The Commission's changes seek not only tougher enforcement but also much lower costs and clearer requirements for in-scope businesses.
- EU issued updated guidance and a draft law broadening the Deforestation Regulation’s product list.
- Newly covered goods may include soluble coffee and more palm oil derivatives.
- Exclusions proposed: leather goods, certain packaging, used items, and waste.
- Commission projects a 75% drop in annual compliance costs for affected businesses.
The European Commission has introduced updated guidance and a draft legal add-on for the EU Deforestation Regulation (EUDR), aiming to clarify company duties and alter which products fall under strict green rules. The EUDR, in force since 2023, bans high-risk goods of deforestation origin—like cattle, cocoa, coffee, soy, palm oil, and wood—unless businesses carry out strict traceability and due diligence.
- The latest draft, published May 4, 2026, proposes to add certain 'downstream' items—finished or processed products containing at-risk materials, such as soluble coffee and some palm oil-based chemicals.
- Other categories are slated for removal or exclusion, including finished leather goods, remanufactured tires, samples, second-hand goods, and waste, to focus compliance where risk is highest.
- The draft act, a "delegated act," is a type of regulation that allows the Commission to update detailed EUDR rules without rewriting the primary law.
The Commission estimates that streamlining these rules could lead to a 75% annual cost reduction for businesses compared to the existing scope, but did not provide a public breakdown of this calculation. NGOs and green groups urge vigilance to ensure that exclusions do not undermine the law’s environmental aims, as reported by Euractiv.
The public can comment on the proposed changes until June 1, 2026. The updated regulation is set to apply from December 30, 2026 for large and medium firms, and from June 30, 2027 for small companies handling timber. The Commission is also improving its compliance IT systems to ease the new reporting burden.
By the numbers:
- 75% — projected annual compliance cost reduction under EU estimates
- December 30, 2026 — new regulation deadline for most businesses
- June 1, 2026 — public feedback closes on draft act
Yes, but: Critics caution that widening exclusions may weaken environmental safeguards despite lower compliance costs.
What's next: Public consultation on the draft changes closes June 1, 2026; final rules expected later in 2026.