The European Deforestation Regulation (EUDR) was due to come into effect from December 2024 onwards, requiring companies to prove that commodities such as palm oil, beef, soy, coffee and cocoa are not linked to deforestation or human rights abuses. It was delayed last year due to pressure from industry groups.
Now, the European Commission has now proposed another 12-month delay until the end of 2026, citing information technology (IT) issues and pressure to ease regulatory red tape.
The retreat is part of Brussels’ broader push to prioritise economic competitiveness over more stringent climate action. European industry groups have argued the law is too complex and costly, while trading partners including Indonesia, Malaysia and the US have lobbied against it.
EU environment commissioner Jessika Roswall said companies were not ready. “We still cannot believe that we can really get this without disruption for our businesses,” she said told reporters at a press briefing on Tuesday, and denied the move was linked to the conclusion of trade talks with Indonesia earlier this week.
The EU and Indonesia struck a deal covering industries including electric vehicles, electronics, and pharmaceuticals on Monday, which had been a decade in the making.
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The EUDR in its current ‘all or nothing’ design excludes smallholders rather than bringing them along. That is where change is needed – not just more delays.
Carolyn Lim, head of corporate communications, Musim Mas
Indonesia pushes for exemptions for smallhlders
The delay comes as Indonesia’s palm oil industry is lobbying for changes to EUDR. Earlier this month, the Indonesian Palm Oil Association (GAPKI), an industry lobby group, submitted feedback to the European Commission’s inquiry on simplifying environmental reporting.
The group, which welcomed the delay to EUDR, called on Brussels to exempt smallholder farmers from the EUDR’s reporting requirements and to recognise Indonesia’s national sustainability certification scheme, the Indonesian Sustainable Palm Oil (ISPO) standard, as a pathway to compliance.
“GAPKI and its many Indonesian stakeholders are supportive of the regulation’s goal of reducing global deforestation,” said GAPKI chairman Eddy Martono. However, the potential exclusion of Indonesian smallholder farmers from European markets – whether in palm oil, rubber, coffee, timber or cocoa – is a significant risk to their livelihoods, as well as to achieving the goals of the regulation.”
Martono said recognising ISPO would align the EU’s requirements with national frameworks and reduce unnecessary costs. “Our concerns are not that different from the many European stakeholders that have been critical of the regulation,” he added, pointing to the conclusion of the Indonesia-EU trade agreement as “a perfect opportunity” for collaboration.
‘Every delay risks eroding market confidence’
Some palm oil firms, like Singapore-headquartered Musim Mas, say they are already prepared to comply – but share GAPKI’s concerns about smallholder exclusion. “Musim Mas has been preparing for three years, and we are ready to comply. But the EUDR in its current ‘all or nothing’ design excludes smallholders rather than bringing them along. That is where change is needed, not just more delays,” the company told Eco-Business in a statement.
Meanwhile, the Roundtable on Sustainable Palm Oil (RSPO), the lead certification scheme for sustainably cultivated oil, noted that the palm oil sector is further ahead than other commodities in preparing for compliance, pointing to long-standing transparency efforts and new traceability systems such as its Prisma platform.
Environmental non-profts, however, see the delay as backsliding. Conservation group WWF called it an “unacceptable and massive embarrassment” for European Commission president Ursula von der Leyen. Thomas Waitz, co-chair of the European Green Party, described the decision as a “dark day for global forest protection.”
Nicole Rycroft, founder and CEO of Vancouver-based environmental non-profit Canopy, said the delay not only risks forests but undermines business certainty.
“Forests – and the climate – cannot afford another year of inaction. Every delay risks eroding market confidence, slowing progress, and undermining those companies already moving in good faith to prepare their supply chains,” she said in a statement.
“Companies must use this delay as a springboard, not a snooze button… By moving faster, businesses not only get ahead of regulation, but also respond to growing consumer and investor expectations for leadership and resilience.”
Critics say Europe’s repeated backtracking undermines its credibility as a global climate leader. While parts of the palm oil industry are demonstrating readiness, other commodity sectors remain far behind, raising the risk that further delays and carve-outs could hollow out the regulation.
The EUDR delay emerges a few months after the regional block delayed the introduction of the Corporate Sustainability Reporting Directive (CSRD), which will mandate companies of a certain size to report their sustainability credentials, and the EU Green Claims Directive, which is to clamp down on greenwashing.
