A Delay in the EU’s Deforestation Regulation is Just Bad Business

Today, the European Parliament faces a pivotal vote on whether to delay the European Union Deforestation Regulation (EUDR) by a year. 

Originally set to take effect on December 30, 2024, the EUDR is arguably the most consequential law for global forests in the past decade and requires companies importing key commodities—including timber, coffee, packaging, and rubber—to prove that their supply chains are free from deforestation or ecosystem degradation.

In 2023, 3.7 million hectares of tropical primary forest were lost, alongside ongoing and significant degradation of temperate and boreal forests. The world cannot afford a single hectare more.

At COP16, the world’s largest biodiversity conference, experts underscored the urgent need to protect remaining forests and invest in conservation, as global wildlife populations have already declined by an average of 73% and forests are key in stabilizing the climate. Delaying the enforcement of the EUDR will have an impact equivalent to the emissions of 18 million cars and the destruction of critical habitats for some of the planet’s most endangered species.

The 11th hour discussion of delaying implementation stems from intense pressure from agriculture ministers in EU member states, major exporters like Indonesia and Malaysia, and global powers like the United States, with claims that the regulation’s geolocation and traceability requirements are too challenging for producers. Countries like Sweden, Australia and Canada, whose carbon-intensive forestry sectors have benefitted from regulation focused purely on tropical forest degradation over the years, have also raised issues, despite publicly supporting the principles and objectives set out in the legislation. 

It’s not surprising to see push back. Many of the most vocal objectors to EUDR don’t exactly have stellar track records when it comes to forest degradation and they don’t want to lose access to one of the world’s largest markets.  

While opponents portray meeting the EUDR as impossible, reality in the private sector tells a different story. 

Players across industries have already invested in due diligence systems, restructured teams, and allocated resources to ensure their ability to comply with the landmark legislation by the end of this year. Many of Canopy’s brand partners have diligently prepared for the legislation coming into effect – and even stretched beyond current parameters to include products like viscose, a forest fiber used in clothing manufacturing, which are not on the original EUDR product list but likely will be in the future. 

Food giants including Nestlé, Mars Wrigley, and Ferrero have even publicly advocated for the regulation, calling on the EU to enhance support for businesses striving to meet the original 2024 deadline. 

Notably, smallholder farmers—those whom detractors claim will struggle most—have also voiced strong support for the EUDR. In a powerful display of alignment, 120 civil society groups and farmers' organizations from Ghana and Côte d’Ivoire, representing over 700,000 cocoa farmers, recently endorsed the regulation. In an open letter, they highlighted how small producers are already implementing geolocation systems, showing that compliance is not just possible but is already happening, even with limited resources.

The EUDR isn’t just about climate action — it’s good business. Companies that invest now in low-risk, traceable supply chains know that they will be better positioned to navigate tightening global regulations and shifting market demands. Markets globally are increasing their focus on sustainable sourcing, and companies that lag could end up with outdated supply chains, playing an expensive game of catch up, or worse yet, stranded assets. 

This is why, for example, the fashion and packaging industries are going beyond efforts in sourcing tracing, and investing in supply chain transformations, like the use of circular and Next Gen materials. Made from waste textiles, agricultural residues and food waste, these alternative materials offer companies tree-free ways to ensure compliance, build climate-resilient supply chains, and help them meet sustainability targets. Canopy research finds Next Gen alternatives have 95% to 130% less GHG emissions, 88% to 100% less land-use impacts, and 5x lower impact on biodiversity and threatened species, compared to conventional forest-based products.

Avoiding products that come from the most critical forest ecosystems on earth is hardly a high bar to clear. In my conversations with our 1000 brand partners across fashion, publishing, beauty and personal care, and food and beverage, leaders welcome the EUDR for “leveling the playing field”. They are actively investing in better sourcing and working with their value chain partners to scale circular practices and Next Gen materials that are free of any forest fiber. Policies like the EUDR are essential to incentivize the private sector to continue to strive for more. It lifts the performance of companies that have been slow-to-move and enables leaders to take the next big steps – to accelerate investments in sustainability and deliver the climate and business potential of ground-breaking solutions like Next Gen materials. 

Timely implementation of EUDR provides Europe with a competitive advantage in the global economy, especially with the increasing prominence of priorities like the circular economy in other jurisdictions like China. It will also protect European businesses and the region’s economy against the increasingly volatile nature of conventional supply chains associated with forest degradation. 

The EUDR, along with a suite of other regulations related to the circular economy, creates valuable opportunities that not only promote climate change mitigation and adaptation, but also support European innovators and communities, alongside green economic development across the globe. 

Today, the European Parliament has a choice between voting with the planet, with people, and with our future or rewarding climate lagards. Here’s hoping the European Parliament votes not only with the planet, but also with market resiliency.