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After weeks of speculation that the Regulation on deforestation-free products (the Regulation) was about to be delayed for a further year, a proposal for a regulation amending the Regulation was published by the European Commission (the Commission) on 21 October 2025. While this proposes additional amendments to the Regulation, there is no proposal to change the application date for the first cohort of large and medium-sized entities.
By moving away from the idea of delay, the Commission is likely hoping to appease those who have condemned the prospect since it was first suggested in September as a necessary measure to address serious deficiencies in the IT system underpinning the Regulation. In its press release and documentation around the proposal, the Commission has been keen to stress that its “targeted simplifications” will also ease the burden on the IT system. These amendments should appeal to critics of the Regulation in its current form; although some will argue that these reforms do not go far enough. (See our previous article for more on some of these views on the Regulation.)
So, what are these targeted simplifications? The Commission has proposed the following:
1. Delay for micro and small operators: The Regulation will apply to large and medium-sized operators from 30 December 2025 as planned, but its application to micro and small operators will be postponed by six months, until 30 December 2026.
2. Enforcement moratorium for six months: Large and medium operators subject to the Regulation from the end of this year will enjoy a six-month grace period where they will not be at risk of enforcement actions. This means that national supervisory authorities will not be required, until 30 June 2026, to carry out checks and other measures relating to enforcement for these operators. Where a competent authority becomes aware of non-compliance with the Regulation before 30 June 2026, it may issue warnings and recommendations on how to achieve compliance. However, it may not take any further action until the moratorium ends.
3. New exemptions for non-SME “downstream operators” and traders: The most striking amendment proposed, and the one most likely to receive pushback from some quarters, is to exempt large downstream operators (those who are not small or medium-sized enterprises (SMEs)), as well as non-SME traders, from the obligations to:
This exemption already applies to SME operators and traders.
Under this revised model, responsibility for submitting due diligence statements would rest solely with the operator introducing the commodity or product into the EU market for the first time (the primary operator). To take the example given by the Commission: the importer of cocoa beans would need to submit a due diligence statement as the primary operator, but downstream manufacturers of chocolate products would not be required to submit individual due diligence statements.
Downstream operators and traders would not be relieved of all responsibility, however. Non-SME downstream operators and traders would still be required to register in the IT system “since they have a significant influence on supply chains and play an important role in ensuring that supply chains are deforestation-free”. In addition, all downstream operators and traders (whether SMEs or not) would still be obliged to provide the primary operator with reference numbers and declaration identifiers to ensure traceability.
4. Simplified, one-time statement for new category of “micro and small primary operators”: Instead of the more onerous due diligence obligations placed on primary operators, the Commission has proposed a one-time, simplified due diligence declaration for this category. This simplified arrangement is aimed at small farmers and businesses, who are established in low risk countries (inside and outside the EU) and placing on the EU market, or exporting from the EU, products that they’ve grown, harvested, or raised in the case of livestock. Most opposition to the Regulation has flagged the burden that the Regulation will place on small farmers and producers, so they will welcome this proposal.
Helpfully, the Commission has also recommended including a clarification that the definitions of micro, small, or medium-sized enterprises, which are determined in accordance with the Accounting Directive, should apply irrespective of legal form.
What happens next?
The Commission’s proposal for an amending regulation requires the approval of both the European Parliament and the Council of the EU. With the commencement date of 30 December 2025 looming, the Commission has called on these institutions to “swiftly” adopt its proposal. However, given the starkly opposing attitudes to the Regulation and the current difficulties that simplification legislation is encountering in the European Parliament, it is possible that the legislative process will not be concluded in time. The Commission has indicated that it is working on “contingency plans” in the event that this situation comes to pass. What these contingency plans might look like is not yet clear, but it might take the form of a Commission communication requesting that Member States refrain from enforcing the Regulation for a transitional period. We will be watching developments with interest!
For further information on this topic, please contact Anne O’Neill, Knowledge lawyer, Jill Shaw, ESG & Sustainability Lead, or any other member of ALG’s ESG & Sustainability group.
Date published: 23 October 2025
