EUDR Delay: Will the US Be Exempt as a ‘No Risk’ Country?

The implementation of the European Deforestation Regulation (EUDR) has been postponed for twelve months following a decisive vote in the European Parliament, which also introduced nine amendments. Among the most significant is the addition of a “no-risk” country category. The designation aims to simplify compliance for countries with stable forestry practices and minimal deforestation risk. However, critics argue that it undermines the regulation’s climate-saving objectives. 

This article explores the EUDR’s critical challenges, their implications, and whether the US could qualify as a “no-risk” category. 

Details on EUDR Postponement and Key Amendments 

Following a vote, Parliament has confirmed the EUDR implementation delay, granting larger operators until December 30, 2025, and smaller enterprises until June 30, 2026, to achieve compliance. Additionally, the benchmarking system has also been extended to June 30, 2025.  

The decision provides more time for EU member states, developing countries, operators, and traders to meet the regulation's due diligence obligations. While many businesses welcomed the delay as a chance to address administrative complexities, environmental groups have expressed concerns, arguing that it weakens the urgency of addressing deforestation. 

Reactions to the delay were mixed. Many organizations expressed relief, emphasizing the need to simplify regulatory processes. Conversely, environmental groups spoke out against the delay, labeling it detrimental to climate mitigation efforts.  

“No Risk” Designation Explained 

The recent EUDR amendments include the addition of a “no-risk” country classification to the existing Country Benchmark categories, which already include low-, standard-, and high-risk designations. This new category is designed to ease compliance obligations for businesses sourcing materials from countries deem “no risk.” 

For instance, operators sourcing from “no-risk” countries are exempt from submitting due diligence statements, geolocation data, and harvest dates for land involved. In contrast, those operating in higher-risk categories must comply with the full set of EUDR requirements.  

Operators placing, making available, or exporting relevant commodities and products originating from countries or regions classified as “no-risk” under Article 29 must comply with documentation requirements by providing the following information to competent authorities upon request: 

• Trade name and product type of the relevant items 

• Quantity of the relevant commodities or products 

• Country of production and, where applicable, specific regions within that country 

• Supplier information, including name, postal address, and email address of the business or individual providing the products 

• Recipient information, including name, postal address, and email address of the business, operator, or trader receiving the products 

• Verified evidence confirming that the products are free from forest degradation 

• Verified evidence demonstrating that the commodities were produced in compliance with the legal requirements of the production country 

Qualification Criteria 

For a country to be designated as “no risk,” it must meet these criteria: 

1.  Forest Stability: Forested areas must have remained stable or increased since 1990. 
2. Global Commitments: The country must be a signatory of the Paris Agreement and other relevant international conventions on human rights and forest conservation. 
3. Regulatory Enforcement: National forest conservation laws must be fully enforced with transparent monitoring. 

Will the US Be Classified “No Risk?” 

US-based businesses are keen to know whether the country will be designated “no risk.” While some argue the US fits the profile due to its stable forestry practices, significant challenges remain: 

• Lack of National Forest Regulation: The US does not enforce national-level forest conservation laws with transparent monitoring, a key criterion for the “no-risk” designation. 

• Commitment to the Paris Agreement: While the US is currently a signatory, uncertainty looms as the incoming administration under Donald Trump has previously withdrawn from the agreement. 

Even if the US remains in the Paris Agreement, the absence of national forest conservation measures would likely disqualify it from the “no-risk” category. US-based operators will need to prepare to comply with the full scope of EUDR due diligence requirements. 

Criticism of “No Risk” Classification 

While the classification aims to streamline operations for certain regions, it has sparked criticism for potentially undermining the regulation’s overall effectiveness. 

Critics warn that the designation risks creating loopholes in the EUDR. For example, products from high-risk countries could be rerouted through “no-risk” nations, undermining the regulation’s goals. This could lead to issues such as “resource laundering,” particularly in countries with weaker governance. 

Environmental advocacy groups have called the amendment a step backward. These organizations view the proposal as a “terrible signal” regarding potential inequity among enforcement.  

Julia Christian, a Forests and Agriculture Campaigner at Fern, an environmental and social justice organization, criticized the move as “green protectionism,” which she argued could exacerbate inequities and provoke frustration among producer countries outside the EU.  

Lawmakers will now need to negotiate with EU governments to reach a compromise. This could create rifts among mainstream political parties as they work toward establishing a new European Commission.  

Challenges to Country Classifications and Alleged WTO Violations 

The European Commission has yet to finalize the classifications for each country under the EUDR risk categories. A high-risk designation could carry reputational damage for affected countries as well as increased bureaucratic obstacles for their exports. 

Even within the EU, uncertainty remains about whether all member states will qualify for the “no risk” category. Countries with significant forest coverage, such as Finland and Sweden, may face challenges meeting the criteria. French Member of the European Parliament (MEP) Pascal Canfin has raised concerns that this could harm the EU single market by inadvertently favoring non-EU imports. He warned that the amendments could make it easier to import timber from countries like China than from EU member states such as France or Finland.   

Beyond the EU, the risk classifications have already triggered diplomatic tension with key trading partners. Brazil’s Confederation of Agriculture and Livestock (CNA) has openly criticized the European Parliament, accusing it of unfairly favoring EU member states.  

Felipe Spaniol, an advocacy coordinator for the CNA, called this a blatant concession to European interests, warning it could distort trade dynamics. Such perceived protectionism could also create hurdles in ongoing negotiations for a trade agreement between the EU and South America's Southern Common Market trade bloc (Mercosur). 

These classifications also raise concerns about potential violations of World Trade Organization (WTO) rules. Critics argue that the uneven application of the EUDR could lead to formal legal challenges, a process that would likely take years to resolve. Spaniol noted that the CAN is prepared to explore “all options available” to address what he described as a “poorly drafted” regulation. 

The growing criticism highlights the complexity of balancing environmental goals with fair and equitable trade practices, especially in a globally interconnected market. 

Preparing for EUDR Changes 

The postponement of the EUDR and the introduction of the “no-risk” category represent significant shifts in the regulatory framework. While the delay provides much-needed breathing room for companies to prepare, the amendments raise critical questions about the regulation’s ability to meet its climate goals effectively. 

For businesses, the path forward requires a dual focus: staying ahead of evolving compliance requirements and preparing for the complexities of sourcing under the new benchmarks. Companies must remain proactive in understanding how these changes will impact their operations. 

To navigate these changes effectively, companies should focus on staying informed about regulatory updates and ensuring their compliance processes are efficient and thorough. Taking proactive steps to meet EUDR requirements can help avoid penalties and maintain smooth operations while demonstrating a commitment to sustainable and transparent supply chains.