Recently deforested land in Papua, Indonesia
- A group of European agriculture ministers has called to reopen the EU Deforestation Regulation (EUDR), Europe’s law that will prohibit imports of deforestation-linked goods from December 2025
- The ministers’ proposal would classify some countries as at ‘no risk’ or ‘insignificant risk’ of deforestation, offering an exemption from important parts of the law for goods from those countries. A similar proposal was voted down by Member States at the end of 2024
- Introducing a no-risk exemption could incentivise unscrupulous actors to launder commodities from other, riskier locations through so-called ‘no-risk’ countries
- Reopening the EUDR text at this stage would create legal uncertainty for business and put the entire law under threat. EU decision-makers must not cave in to this proposal
The proposal that just won’t die
The European Union Deforestation Regulation (EUDR), the law aimed at ridding key EU commodity supply chains of deforestation and illegality, is due to be enforced from the end of 2025. As companies put the finishing touches on their due diligence systems and place their first orders for traceable, legal, deforestation-free goods, a group of disgruntled European agriculture ministers is again attempting to undermine the law, as they attempted to do in 2024.
At a May 2025 meeting of European agriculture and fisheries ministers, Austria and Luxembourg put forward a proposal for ‘substantial simplification’ of the EUDR, supported by nine other countries.
The proposal would create a new category of countries where there is ‘insignificant risk’ of deforestation, on top of the existing low, standard and high-risk categories. Companies would not need to provide the geolocation data for goods from those countries, and national enforcement authorities would not be obliged to carry out enforcement checks on those goods.
For good measure, the ministers also asked the Commission to introduce the possibility of scrapping the minimum required enforcement checks on goods in the existing low, standard and high-risk categories. They also called for introduction of a compensation scheme to offset deforestation with forest gain, reduce company reporting to a “strict minimum” and further delay the law’s start date. There is little useful detail on what reporting to a strict minimum level would mean in practice or how the compensation scheme would work.
The idea of a no-risk category is not new: in essence it is a rehash of a proposal unsuccessfully put forward by the conservative European People’s Party at the end of 2024. That proposal was voted down by the Council of the EU, with the majority of Member States agreeing to keep the law intact.
Here’s why EU decision makers should disregard this proposal a second time.
Reopening the law will cause chaos, not simplification
Austria and Luxembourg’s proposal asks the EU Commission to “include the deforestation legislation in its simplification plans.”
Recent EU simplification initiatives have taken the form of omnibus deregulation laws.
The term ‘omnibus’ refers to something that covers many elements at once. In lawmaking, an omnibus package brings together several legislative changes into a single proposal and is passed as one measure.
The EU Commission has already proposed four omnibus packages to roll back EU regulations – including one covering corporate sustainability and one on agriculture – and has announced there will be several more omnibus packages to come.
The first of these omnibus packages is in the process of unravelling the EU’s corporate sustainability laws via a rushed and undemocratic process that has already generated a civil society complaint to the Ombudsman. Although this process began with a Commission proposal for a set of discrete amendments, it has devolved into a free-for-all with over 1000 proposed changes put up for discussion.
Make no mistake: reopening the EUDR or including it in a future omnibus package would achieve the opposite of simplification. It could allow every provision of the law to be reopened and every issue debated. The process could take months, if not years, leading to vast legal uncertainty for businesses and punishing those that have already invested time and energy in implementing the law.
The proposed no-risk category is a poorly defined loophole
The proposal for a new no-risk category is light on detail, offering no clear criteria to decide which countries would be in or out of the category. It mentions only two conditions for no-risk classification: a country must have an insignificant risk of deforestation and its national laws and policies must effectively limit the risk of deforestation and forest degradation.
If all or most countries in Europe fall into the ‘no-risk’ category (which is presumably what European agriculture ministers have in mind) this would effectively turn a blind eye to illegal logging in Romania and clearing of old-growth forests in Sweden.
These broad criteria could also potentially afford no-risk status to non-EU countries, possibly including countries with a track record of timber laundering, such as China, which has increased its forest area in recent years.
Legal analysis published in response to last December’s version of the no-risk category proposal found that an exemption under the EUDR for no-risk countries would likely breach WTO rules.
A no-risk category is an invitation to laundering
As the agriculture ministers’ proposal is broad and vaguely worded, it is difficult to assess its potential impact. Based on the available information it appears it would allow goods from allegedly no-risk countries in and out of the EU market without lodging their production geolocation coordinates, and exempt them from mandatory checks by national enforcement authorities (known as Competent Authorities). This would reduce oversight of these goods and exempt them from important parts of the law.
This provides a clear incentive for importers whose goods are linked to deforestation or illegality to attempt to evade the regulation. If no-risk status is granted to countries outside the EU – possibly for diplomatic reasons or to appease the WTO – those countries risk being used as laundering hubs. Once a commodity such as rubber, palm oil or timber is processed in or simply rerouted through a no-risk country, its origin could be easily disguised. With Competent Authorities encouraged to turn a blind eye to no-risk goods, almost all fraud of this kind would go undetected.
To use a hypothetical example: a rubber-producing country such as Vietnam could be designated no risk (as its forest cover has been steadily increasing over the past 20 years). Deforestation-linked rubber from Cambodia could be imported into Vietnam and processed or re-exported to the EU. An unscrupulous importer could then label the whole product as being Vietnamese rubber. The product would not require geolocation coordinates to prove it was harvested in Vietnam and the deforestation associated with the original rubber would be laundered out of the supply chain. The Competent Authority would be unlikely to check the shipment as it would be coming from a no-risk source.
Earthsight’s recent research on laundering of illegal Russian birch plywood documented some of these evasive tactics in action. After Russia’s invasion of Ukraine, sanctions made it illegal to import wood products into the EU if they originated in Russia. However, our investigation found multiple instances of companies mislabelling Russian plywood on customs documentation as Chinese, Kazakh or Turkish to disguise its origins and evade sanctions.
Companies openly offered to supply Earthsight’s undercover investigators with fraudulent customs documents from these third countries to ensure their Russian ply could be imported into Europe without being flagged for sanctions violations. Our investigation identified several European companies knowingly participating in these schemes – including those transporting Russian and Belarusian birch over the border into Poland and then re-exporting it to other EU countries.
Misrepresentation of the origin of products is common – including as a way to evade taxes, tariffs or regulatory checks. A forensic analysis of 73 wood products in the US found 45 of them (62 per cent) had one or more fraudulent or misrepresented claim. A similar government-funded study in Australia found that for 25 per cent of timber products tested, the species, origin or both had been mis-declared.
In 2024, the UK government accused businesses importing goods from the EU of deliberately mis-classifying products on import documentation to circumvent Brexit border charges. Importers had been found listing high-risk products as medium risk, and medium risk as low risk to avoid checks.
If Competent Authorities are not scrutinising goods coming from no-risk countries, evasive actions such as these will likely go undetected.
The EU Commission must not breathe life into this proposal
At the May meeting of EU agriculture ministers, almost all ministers opened their remarks by reiterating their commitment to combating deforestation. This is appropriate, given they were speaking only a week after Global Forest Watch revealed 2024 to be a year of record-breaking tropical forest loss.
If this commitment to deforestation is to be more than just lip service, agriculture ministers need to abandon their plans to reopen the EUDR. If they do not, the Commission must not cave in to them. The challenge of deforestation is vast, but the EUDR is Europe’s best tool to address it. Global Witness’s latest analysis found that the EUDR could help preserve almost 8 million hectares of forest over the next ten years – an area the size of Austria. Europe must implement this vital law as planned.
