Forests are being cut and degraded at an alarming rate, especially in the tropics, with the expansion of agricultural land causing almost 90% of forest reduction, according to a study by the Food and Agriculture Organization of the United Nations .

A first-of-its-kind law called the EU Deforestation Regulation (EUDR) aims to take steps to counter this. The idea is that EU importers have to prove their supply chains for products such as coffee, chocolate, leather, paper, tires and furniture do not contribute to logging anywhere in the world. Failure to do so would mean facing fines of up to 4% of their turnover.

The legislation, which is part of the European Green Deal, was negotiated in detail over several years and adopted by the European Parliament with an overwhelming democratic mandate in December 2022.

Heralded by proponents as a breakthrough in the global battle against forest loss, it came into force in June 2023.

It was due to become effective at the end of 2024. But in October, following complaints from countries both within and outside the EU, the European Commission proposed postponing the implementation by 12 months.

EU lawmakers then not only voted in favor of the delay but also to dilute the conditions of the legislation by reducing the checks proposed within.

Negotiators for the bloc’s governments and lawmakers have now agreed on a compromise that does indeed endorse the delay but does not water down the regulation’s original terms.

Speaking after the agreement was struck, lead negotiator among the different EU institutions Christine Schneider said "we promised and we have delivered." The postponement, she added "means businesses, foresters, farmers and authorities will have an additional year to prepare."

Giulia Bondi, campainger with international investigative nonprofit Global Witness said that ongoing destruction of forests means "we cannot afford delays to much-needed environmental protection laws like the EU's anti-deforestation legislation."

What difference will the delay make?

Analysis shows that in 2023, the world lost some 37,000 square kilometers (14,000 square miles) of tropical forest. That's an area nearly equivalent in size to Switzerland.

"We are facing a global emergency," said Anna Cavazzini, a member of the European Parliament for Germany's Green party. "I simply find it irresponsible to delay this law by another year in this situation," she said ahead of the parliament's original decision.

The year-long delay could equate to additional global forest loss of about 2,300 square kilometers, according to EU studies.

Who wanted the delay and why?

Agriculture and environment ministers, as well as the public, were involved in drafting the original law. But after it was passed, several agriculture ministries — including those of Austria, the Czech Republic, Finland, Italy, Poland, Slovakia, Slovenia and Sweden — began calling for its implementation to be postponed.

Reasons given included businesses not being ready for implementation because of an inadequate benchmarking system.

"It seems that especially some of the European member states have not done their homework in preparing their stakeholders, their industry associations, their Chambers of Commerce for this law in time," said Nicole Polsterer, a sustainable consumption and production campaigner at Fern, a Brussels-based international forest protection NGO ahead of the parliamentary vote.

Polsterer was closely involved in shaping the EU deforestation regulation and said the requirements did "not go substantially beyond the already-applied EU timber regulation," meaning they were not a argument for postponing the law.

A more understandable argument, Polsterer added, is that the European Commission was supposed to help countries implement the regulation by providing digital tools. These would help companies upload due diligence statements or show whether countries have a high, medium or low deforestation risk. But such tools were not fully operational by the time the EU came to vote.

"And now it is indeed a bit late for some companies to prepare themselves for the new law," Polsterer said, adding that there are "other solutions to this problem" besides delaying the rollout altogether.

Schneider said the delay gave time to "complete the online platform and the risk categorisation in six months, ensuring more predictability across the supply chain."

The compromise agreement contains a provision for an "emergency break" should the online system for companies not be fully operational by end-December 2025 or if the country classification is not published at least six months beforehand.

Cocoa producers push for new law

Though some industry groups, including the European Timber Trade Federation and the European Livestock and Meat Trades Union, as well as big US wood companies, claimed they could not have met the EUDR's requirements in time, others are ready to go.

Ghana and Ivory Coast are the world's leading cocoa producers, and Europe is their largest market.

Ivory Coast has set up electronic ID cards for farmers that help track beans from farms to their export ports and allow them to access e-payments, while also guaranteeing growers a price for their produce in light of the new EU regulation.

Ghana has mapped all the cocoa in the country and established an end-to-end traceability system intended to reduce compliance costs of smallholders. And the project has been successfully piloted.

Before November's vote, a group of 120 Ghanaian and Ivorian civil society and farmer organizations appealed to EU decision-makers to express their deep concerns about efforts to delay the law.

Some giants in the cocoa and chocolate sector — including Nestle, Mars Wrigley and Ferrero — also defended the law and opposed postponing.

"This would only serve to increase uncertainty and jeopardize the significant investments our member companies have made in preparing for its application," they wrote in an open letter at the time.

And Polsterer agreed, saying businesses such as Michelin had already invested millions into the new systems to be able to comply with the law by the end of 2024 and had offered special contracts with premiums to their suppliers and that a delay in implementation would threaten their competitive edge.

"I don't think this bodes well for business security and Europe's relationship with the trade partners," she said.