This month, the European Parliament faced a pivotal vote and decided to delay the European Union Deforestation Regulation, or 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. It 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 the face of a delay, food giants including Nestlé, Mars Wrigley, and Ferrero have publicly advocated for the regulation, calling on the EU to enhance support for businesses striving to meet the original 2024 deadline and critiquing any delay or revisions. Smallholder farmers – those whom detractors claim will struggle most – have also voiced strong support for the EUDR. 

That’s because the EUDR isn’t just about climate action – it’s good business.

Markets globally are increasing their focus on sustainable sourcing. 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. Companies that lag could end up with outdated supply chains, playing an expensive game of catch up, or worse yet, stranded assets. 

Action urgency

In 2023, 6.4 million hectares of forests were lost, alongside ongoing temperate, boreal and tropical forest degradation. The total area of forests degraded last year was 10 times the scale of deforestation. The world cannot afford a single hectare more.

Global wildlife populations have already declined by an average of 73%. At COP16, the world’s largest biodiversity conference, experts underscored the urgent need to protect remaining forests and invest in conservation. 

Similarly at COP29 in Azerbaijan, the integral role of forest conservation in stabilizing the climate is once again being stressed by negotiators and scientists alike. Delaying the enforcement of the EUDR will have a serious 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 eleventh hour campaign to delay implementation stems from intense pressure from agriculture ministers in EU member states, major exporters like Indonesia and Malaysia, and global powers like the US, 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 all benefited from regulation focused purely on tropical forest degradation over the years, also raised issues, despite publicly supporting the principles and objectives set out in the legislation. 

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

A better business case

Opponents portray meeting the EUDR as impossible, but the 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 1000+ 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. 

In addition to food giants’ advocacy, 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.

Avoiding products that come from the most critical forest ecosystems on earth is hardly a high bar to clear. In conversations with our 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 also essential to incentivizing the private sector 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. 

The fashion and packaging industries, for example, are going beyond efforts in sourcing tracing, and investing in supply chain transformations, like the use of circular and next generation 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.

Green competitive advantage

Timely implementation of EUDR promised to position 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. The EUDR, along with a suite of other regulations related to the circular economy, creates valuable opportunities for European innovators and communities, alongside green economic development across the globe. 

The EUDR was poised to be a turning point for forests, climate action, and sustainable markets. Instead, the decision to delay implementation introduced uncertainty for businesses, many of whom are also grappling with increased volatility of climate-disrupted supply chains and geo-political headwinds. It also underscored that we are still moving much slower than the planetary crisis demands.One year isn’t just a delay – it’s a missed opportunity to set a new standard. But delay doesn’t mean we pause. It’s a reminder to accelerate. We know many businesses that will continue to push forward with urgency, aligning their practices with the reality of climate-disrupted supply chains and the inevitability of policies like the EUDR. The question isn’t whether change is coming – it’s a question of who will lead it and who will chase.