At the end of April, the European Commission will publish its simplification review of the EU Deforestation Regulation (EUDR), a landmark law designed to curb deforestation globally. The review could reduce the regulation’s effectiveness.

Under the EUDR, set to take effect in December 2026, all companies operating in the EU must prove that certain products they sell, import or export — in particular, seven key commodities: timber, cattle, cocoa, coffee, oil palm, rubber and soy, including products made from them, such as furniture and chocolate — did not contribute to deforestation or forest degradation. The regulation could be a major boon to forest protection — the EU is the second-largest importer of goods linked to tropical deforestation, after China. But various interest groups are increasing pressure on the European Commission to reopen or weaken key provisions. Many are focused on the idea of introducing a no-risk category to the law’s country benchmarking system.

The EUDR’s country benchmarking system currently classifies countries as low, standard or high risk of deforestation to help guide due diligence requirements. Under a no-risk category, companies sourcing products from countries classified as having stable or increasing forest cover would be exempt from submitting due diligence statements that prove their products did not contribute to deforestation. While this is intended to reduce the compliance burdens on companies, it would create loopholes for deforestation laundering and expose the regulation to World Trade Organization (WTO) legal challenges, undermining the EUDR’s effectiveness and legitimacy.

The European Commission has resisted previous attempts to dilute the regulation’s impact. Major businesses in Europe’s chocolate and confectionery industry are also calling for the legislation not to be reopened. To ensure the integrity of the EUDR and provide regulatory certainty for businesses, the EU must focus on robust implementation without further legislative changes.

Here, we outline why a no-risk category jeopardizes the EUDR’s effectiveness and why the current regulation is already fit for purpose.

How a ‘No-Risk’ Category Would Undermine the EUDR

Removing due diligence requirements for products supplied from ‘no-risk’ countries would make it significantly more difficult to trace product origins and verify compliance with the EUDR. This would impede competent authorities — EU member states’ national enforcement bodies — from carrying out checks to ensure products are deforestation-free, while also increasing the risk of companies unintentionally sourcing non-compliant products. As a result, preventing deforestation-linked goods from entering or leaving the EU market would be effectively impossible, rendering the EUDR unenforceable.

Without the key due diligence requirements in place, tropical forests are at even greater risk. An unenforceable EUDR would do little to deliver on the EU’s commitment to halt and reverse forest loss and land degradation by 2030 and could worsen, and even accelerate, global deforestation, biodiversity loss and greenhouse gas emissions.

Here are three ways a no-risk category would weaken the EUDR:

1) The Laundering Loophole

Commodities are often traded, processed and re-exported across complex, multi-country supply chains. Without a requirement to trace products back to their origin, a no-risk category creates a loophole for deforestation laundering.

The risk operates on two levels:

Intentional laundering: Strategic transshipment through no-risk countries allows high-risk commodities to enter the supply chain. For example, beef or timber from high-risk regions could be shipped to a no-risk third country, processed and then exported to the EU, with no obligation to verify its origins. An InSight Crime report documented how cattle linked to illegal practices are moved across borders in Central America and Mexico to exploit gaps in monitoring and traceability systems. Similarly, an investigation by Earthsight found that Russian “conflict timber” is laundered through third countries to bypass EU sanctions.

For those profiting from deforestation-linked production, a no-risk exemption could be a free pass to sell to the EU market without having to show where their products actually came from.

Unintentional laundering: Even without intentional wrongdoing, large volumes of trade could fall outside the EUDR compliance framework because of the complexity of the global trade system. Some products are processed and re-exported through third countries for various reasons such as local tax breaks, labor costs and logistics. Turkey, Vietnam and China supply substantial volumes of furniture to the EU but only harvest limited amounts of timber from their own forests. Similarly, Vietnam supplies rubber products to the EU, but sources a lot of the rubber from Laos and Cambodia.

As a general example, wood imported into a classified no-risk country and used to make furniture could then be exported to the EU without needing to verify its actual country of harvest. This creates a legal pathway for high-risk materials and products to enter the EU market, undermining the effectiveness of the EUDR. 

2) The WTO Challenge

A no-risk category based on country classifications rather than objective sector-wide criteria, such as plot-level data, can trigger WTO disputes and undermine the EU’s credibility in defending the regulation internationally. Allowing no-risk exemptions to some countries but not others risks violating the WTO’s principle of non-discrimination.

WTO rules, specifically the General Agreement on Tariffs and Trade (GATT), are designed to create a level playing field for all. The current EUDR is defensible because its requirements apply to products and their deforestation impact, regardless of where they are produced.  Introducing a no-risk exemption to even one EU Member State, while excluding trading partners with similar profiles, would be a de facto “national treatment” violation, giving domestic products an unfair advantage over imports.

If legal challenges to the EUDR are successful, it would have considerable impact on the EU's credibility as a trade partner and global leader in environmental governance.  

3) A Low-Risk Category Already Exists

Some of the most vocal proponents of the no-risk category are based in countries already classified as low risk under the existing EUDR country benchmarking system.

All low-risk countries, such as EU Member States and the United States, already benefit from significantly reduced compliance requirements. While operators are still required to collect certain information as part of the due diligence system, sourcing from low-risk countries eliminates the need to carry out additional risk assessments and risk mitigation steps.

Introducing a no-risk category would not simplify the regulation; it would undermine it. A new category would create uncertainty for the country benchmarking system and due diligence exemptions granted for countries with so-called negligible risk of deforestation. Instead of reducing burdens, it would create regulatory complexity and weaken the existing monitoring and enforcement mechanisms.

Stay on Course to Ensure Success  

Since its adoption in 2023, the EUDR has faced several proposed amendments and delays. While these are often framed as simplifications, they have led to greater regulatory uncertainty. This uncertainty affects businesses, which need time and clarity to prepare to avoid disruptions in trade. The most effective way to simplify the EUDR is to ensure its robust and consistent implementation — not to dismantle its core requirements.

There is no time left for regulatory retreats. It is time to move ahead with the swift implementation of the EUDR to ensure a deforestation-free market and a sustainable future for our global forests.