At the heart of the EU’s deforestation law is a bold mandate for companies to provide verifiable proof that their supply chains are deforestation-free. This would mean establishing a robust system of traceability, especially for products linked to major environmental risks such as palm oil, soy, and cocoa. Compliance would involve not only meeting specific data-sharing requirements but also navigating complex issues related to geolocation data and national regulations in source countries. For large companies, the deadline has served as an incentive to accelerate their sustainability efforts, invest in new technologies, and establish clearer due diligence processes.
However, small-scale producers and farmers in commodity-exporting countries are facing significant hurdles. Many of these farmers lack the resources and infrastructure necessary to meet the new requirements. The cost of compliance could prove prohibitive, leaving them vulnerable to exclusion from international markets that demand traceability and sustainability credentials. Smaller operations, especially in countries like Brazil, Indonesia, and Malaysia, risk being left behind, unable to prove their products are deforestation-free due to limited access to the technology and expertise required to collect and report the necessary data.
While large industry players have generally welcomed the proposed delay as an opportunity to fine-tune their compliance systems, the delay brings little relief to small farmers who will still face mounting pressure to comply with the law’s stringent standards in the near future. This regulatory uncertainty underscores a key concern: even with a delay, many producers will continue to struggle with the inherent challenges of meeting the law’s requirements.
“We need clarity and certainty as soon as possible,” said Nathalie Lecocq, director general of Fediol, the European vegetable oil and protein meal industry association. "The actors in the supply chain need to understand what the expectations are to ensure proper implementation." For many companies in the sector, the stakes are high. Producers and traders have already invested heavily in systems to map their supply chains, and any further delay in finalizing the law could risk undermining these efforts and cause further disruption to commodity markets.
The delay proposal has sparked debate among industry groups, with some arguing that the law should proceed without modification, while others advocate for a more flexible approach to implementation. Major companies like Mars Wrigley, Mondelez, and Nestlé—who have already made significant investments in sustainability and traceability—strongly support the proposed delay but caution against reopening the substance of the regulation. The Cocoa Coalition, a group of industry leaders, insists that revisiting the law’s terms would create unnecessary uncertainty and undermine the progress made so far.
On the other hand, some companies are highlighting the ongoing challenges associated with the regulation, particularly for sectors like coffee and palm oil. For instance, Lavazza, an Italian coffee maker, noted that while the delay provides some breathing room, it is unlikely to resolve the underlying implementation challenges that affect both small-scale producers and exporters. Lavazza expressed concerns that the high compliance costs could force them to limit their sourcing options, which would have a direct impact on their business. The company also pointed out that the coffee supply chain is already under significant pressure due to climate change, logistical bottlenecks, and rising raw material costs.
The delay could offer more time for firms to address these challenges, including the technical aspects of the law, such as ensuring accurate geolocation data and aligning national regulations with the EU’s traceability requirements. Yet, the clock is ticking, and with the regulation now proposed to be binding in 2025 for large operators and in 2026 for smaller firms, the pressure is mounting for businesses to ensure compliance across their global supply chains.
The proposed delay has also stirred a broader debate on the potential consequences for global trade and the environment. Some major commodity-exporting nations, including Brazil, have expressed concerns that the law could create trade barriers and disproportionately impact small farmers. Brazil, one of the largest exporters of the products covered by the regulation, has warned that the law could affect up to 30% of its exports to the EU, potentially disrupting key trade relationships.
Environmental groups have voiced strong opposition to the delay, arguing that any postponement would reward companies benefiting from deforestation and undermine efforts to halt biodiversity loss. More than 220 organizations, including the World Wildlife Fund and Greenpeace, have called for the European Parliament to reject the delay, citing the urgent need for action to curb deforestation and protect vital ecosystems like the Amazon.
As the law’s fate hangs in the balance, the EU finds itself at a crossroads: should it push forward with a regulation that could disrupt commodity markets, or delay its implementation to allow companies more time to adapt? The reality is that the delay, while providing some relief, is not a panacea for the challenges facing the global commodities sector. As businesses, policymakers, and environmentalists continue to navigate this complex issue, the long-term success of the regulation will ultimately depend on its ability to balance environmental objectives with the practicalities of global trade and supply chain management.
For sustainable procurement professionals, the delay presents both an opportunity and a challenge. The window of time may allow companies to refine their compliance strategies, but the fundamental issues around traceability, compliance costs, and small producer inclusion remain unresolved. As such, stakeholders must continue to push for innovative solutions that ensure both sustainability and fairness across the supply chain. The road to a deforestation-free global marketplace is long, but the EU’s deforestation law could serve as a critical milestone in driving meaningful change.