EU Faces Corporate Backlash Over Deforestation Law Delay
Major global corporations are reportedly pushing back against the European Union‘s proposed second postponement of its landmark anti-deforestation legislation, according to recent reports. Companies including Nestlé, Ferrero, and Olam Agri have expressed frustration with the European Commission’s plan to delay implementation until the end of 2026, citing technical issues with the compliance IT system.
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Substantial Investments at Stake
Sources indicate that numerous companies have invested millions in preparation for the EU Deforestation Regulation (EUDR), which requires importers of key commodities to prove their products don’t originate from deforested land. The regulation covers products including cocoa, coffee, rubber, palm oil, soy, dairy, and timber. Analysts suggest that the repeated delays are creating uncertainty for businesses that have already committed significant resources to compliance.
Francesco Tramontin, Ferrero’s vice-president for global public affairs, told the Financial Times that further delay risks “sending the wrong message” to companies and farmers working to meet EU standards. “Either we start implementing it seriously… otherwise we’ll never figure out how to do it,” he stated, according to reports.
Environmental and Competitive Concerns
In a joint letter to EU Environment Commissioner Jessika Roswall, the companies argued that postponing the law “puts at risk the preservation of forests worldwide.” Olam Agri, which operates in the rubber and timber sectors, warned that delay could penalize early adopters and undermine trust in EU sustainability leadership.
Industry observers note that the situation reflects broader market trends where regulatory uncertainty complicates business planning. Tramontin reportedly expressed concern that delays could end up “rewarding the laggards versus those who are leading the way” if the process allows for renegotiation of certain provisions.
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Political Pressure and Implementation Challenges
The report states that campaigners fear reopening negotiations could lead to significant weakening of the law. Rightwing Members of the European Parliament are reportedly lobbying for a “no risk” category that would exempt EU member states, while the current system benchmarks countries based on deforestation risk within their borders.
The legislation has faced criticism from major EU trading partners, including Brazil, Indonesia, and Malaysia – significant exporters of products like soy and palm oil to Europe. The United States has also reportedly pressured Brussels for exemptions during trade negotiations, creating additional complexity for supply chain management.
Proposed Solutions and Technical Alternatives
Instead of a full delay, the companies have proposed treating technical implementation difficulties as force majeure for importers. They’ve called for an official commission notice clarifying this approach and requesting a grace period of up to six months without penalties while the system is fixed.
The corporations also recommended establishing a technical working group comprising EU officials, national authorities, and businesses to coordinate implementation. This approach aligns with related innovations in regulatory compliance technology that could streamline the process.
Meanwhile, MEPs from liberal and leftwing groups have urged the commission to dedicate necessary resources to ensure the system becomes operational by year-end. The ongoing situation demonstrates how recent technology implementations can impact environmental policy timelines, particularly when dealing with complex global supply chains involving products like cocoa and other agricultural commodities.
The European Commission is expected to formally propose the delay in the coming weeks, requiring approval from both the European Parliament and member states before taking effect.
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