In a key vote on Wednesday, EU lawmakers rejected the proposed country benchmarking system under the EU Deforestation Regulation (EUDR)—a move that could delay implementation of one of the EU’s most critical tools for aligning trade with its ESG goals and carbon neutral strategy. 

The EUDR, introduced in 2021, aims to ban deforestation-linked commodities—including palm oil, beef, timber, cocoa, and soy—from entering or leaving EU markets. Companies must perform strict due diligence, tracing products back to plots of land to ensure no deforestation occurred after 2020 and that local laws were followed. 

Central to the EUDR was a benchmarking system categorizing countries as low, standard, or high risk for deforestation. This classification was intended to adjust the compliance burden based on risk level, easing requirements for sourcing from “low-risk” nations. However, a motion led by the European People’s Party (EPP), passed by a majority of MEPs, criticized the system’s reliance on outdated data and inadequate differentiation between country profiles. The EPP advocates for a new “no-risk” category for countries with stable or growing forest areas. 

The vote follows a previous delay in EUDR implementation—now set for December 2025 for large companies and June 2026 for SMEs—due to concerns from global partners and uneven readiness among EU stakeholders. 

Environmental groups, including Greenpeace, warned the rejection may further weaken the EU’s climate leadership. “The EUDR must be enforced as scheduled to protect global forests,” said Greenpeace’s Sigrid Deters. 

This development raises fresh questions about the EU’s ability to deliver on its deforestation-free trade agenda, potentially hindering broader ESG commitments and delaying tangible progress on its carbon neutral strategy. 

Source: 

https://www.esgtoday.com/eu-lawmakers-reject-eudrs-country-risk-system-in-new-setback-to-deforestation-regulation/