The EUDR Takes Shape: What the Commission's May 2026 Package Actually Changes

On 4 May 2026, the European Commission published its most comprehensive implementation package to date for the EU Deforestation Regulation (EUDR), including a simplification review report, updated Guidance and FAQs, a draft Delegated Act to refine the product scope, and a Staff Working Document outlining the methodology behind the proposed changes. The Regulation takes effect on 30 December 2026 for most companies and on 30 June 2027 for micro and small operators.

The package is substantial and worth reading carefully rather than through the lens of any single headline.

Simplification: 75% reduction in estimated compliance costs

The Commission's review concludes that the combined effect of legislative amendments adopted in 2024 and 2025, together with the new simplification measures, is expected to reduce annual compliance costs for companies by approximately 75%, from an estimated EUR 8.1 billion under the original text to EUR 2.0 billion. The largest reductions come from the introduction of a simplified regime for micro and small primary operators (MSPOs) and from clarifications on downstream obligations. Under the revised framework, responsibility for due diligence rests with the first operator placing a product on the EU market. Downstream operators and traders are no longer required to submit due diligence statements or to verify that due diligence was exercised upstream, unless substantiated concerns arise. Their obligation to collect reference numbers from upstream operators is explicitly described as passive.

Product scope: additions, removals, and horizontal exemptions

The draft Delegated Act proposes targeted changes to Annex I of the Regulation. Soluble coffee, frozen cattle tongues, and a range of palm oil derivatives used in the oleochemicals industry (including soap bars and flakes) are proposed for inclusion on the basis that their absence creates gaps in supply chain obligations and risks relocating rather than eliminating deforestation. Leather (raw hides, tanned hides, and further prepared leather of cattle) is proposed for removal. The Commission's reasoning centers on the differentiation of the leather value chain from the meat value chain, the limited leverage of EU leather operators over upstream cattle producers, and the fact that downstream leather goods (footwear, handbags) would remain outside scope, creating an uneven playing field. Retreaded tires are also proposed for removal, with obligations limited to the new rubber tread applied to old casings.

In addition, the draft introduces horizontal exemptions for samples and products used for testing, waste and second-hand products, single-use and reusable packaging used to carry other products, items of correspondence, and marketing materials accompanying other goods. It also adds clarifying notes on which species fall under each commodity category, confirming that bamboo, rattan, and other non-wood materials of woody nature are not covered.

The draft Delegated Act is open for public feedback until 1 June 2026 on the European Commission's Have Your Say portal.

Under the surface: the technical requirements that define the regime

Beyond the policy-level changes, the EUDR's operational architecture rests on a set of technical requirements that will determine, in practice, how compliance works on the ground.

At the core of the system is geolocation. Operators must collect and submit the geographic coordinates for every plot of land on which a covered commodity was produced. For plots larger than 4 hectares, this must be provided as a polygon describing the perimeter, using latitude and longitude coordinates with at least 6 decimal places of precision. For plots under four hectares, a single coordinate point is sufficient. For cattle, a single geolocation point is required for each establishment where the animal was kept. These coordinates do not require mobile network coverage to collect: GNSS-enabled devices, including standard mobile phones using signals from systems like Galileo, are sufficient. This is a significant design choice, as it means that satellite signal reception, not internet access, is the operational gatekeeper for EU market entry.

The regulation prohibits mass balance chains of custody. Commodities must be segregated from products of unknown or non-compliant origin at every step of the supply chain. For bulk-traded goods stored in silos or tanks, the operator must account for all goods that entered the storage facility since it was last emptied. If the facility is not regularly emptied, the operator must declare the geolocation of all goods that entered the system up to a minimum of 200% of its capacity. This creates a strict contamination logic: if a shipment is linked to a thousand plots of land and even one is found non-compliant, the entire batch is disqualified from the EU market.

The regulation also introduces, as the Commission's Guidance describes, a "property contamination" rule. If a compliant plot of land sits within a larger property where another part has been subject to illegal deforestation, the products from the compliant plot are still considered non-compliant because the property's legal status as a whole is affected.

On legality verification, the updated Guidance clarifies that the depth of evidence collection should be proportionate to the level of risk. Operators sourcing from low-risk countries with no indication of non-compliance are not expected to collect comprehensive legal documentation for each individual plot. However, for supply chains where initial information indicates a higher risk, in-depth evidence collection on compliance with the relevant legislation of the country of production is required. To support this, the Commission plans to establish by December 2026 two centralized repositories: one listing relevant legislation by country of production, and one cataloging certification schemes applicable to EUDR commodities.

Micro and small primary operators benefit from a significantly lighter regime. Instead of submitting a due diligence statement for each transaction, they submit a one-off simplified declaration to the Information System. They may use a postal address instead of geolocation coordinates, provided it clearly corresponds to the geographic location of the plots or establishments concerned. Cooperatives and associations can submit declarations on behalf of their members.

The EUDR Information System, temporarily closed to integrate changes from the December 2025 amendment, is scheduled to reopen in June 2026, with additional functionalities to follow later in the summer. These include simplified declarations, registration of new roles (MSPOs, non-SME downstream operators), updated API specifications, and voluntary grouping tools.

The environmental case

The Commission estimates that the EUDR, under its updated scope, will generate environmental benefits of approximately EUR 7 billion per year, based on 208 thousand hectares of avoided deforestation and 49 million tonnes of avoided greenhouse gas emissions. These figures are derived from deforestation data for the period 2015 to 2020, covering both EU production and embedded imports. Cocoa accounts for the largest share of those benefits, followed by oil palm, cattle, and coffee. Recent FAO data (Global Forest Resources Assessment 2025) indicates that the global annual net forest loss rate has increased again to over 5 million hectares per year, up from 3.6 million per year in the period 2010 to 2020, with agricultural expansion remaining the primary driver.

What to watch

For companies preparing for the December 2026 application date, the practical implications of this package are significant. The updated FAQs (now in their fifth iteration, running to 95 pages) provide detailed guidance on downstream obligations, the role of MSPOs, re-imports, e-commerce, dual roles within supply chains, and the treatment of transitional stocks. The Guidance Document has been updated to reflect the 2025 amendments and includes new sections on legality verification, certification schemes, and definitions of agricultural use.

The draft Delegated Act on the product scope remains subject to public feedback and could be adjusted before finalization. Any companies affected by the proposed additions or removals, particularly in the oleochemicals, leather, coffee, or rubber retreading sectors, should consider submitting feedback before the 1 June deadline.

Why it matters

This package marks the transition from legislative design to operational implementation. The EUDR is no longer a future obligation. It is a regulation that entered into force in less than eight months, with a compliance architecture that is now largely defined. For companies sourcing, producing, or trading in the seven covered commodities, the question is no longer what the rules will look like, but whether internal systems, data infrastructure, and supply chain relationships are ready to operate within them. The scale of simplification measures suggests a genuine effort to make the regulation workable. Whether that effort is sufficient will become clear in the months ahead.

Is your supply chain ready for EUDR compliance?

The EU Deforestation Regulation requires companies to demonstrate that their products have not contributed to deforestation or forest degradation. If you are assessing your due diligence obligations or mapping your supply chain exposure, we can help you structure a compliant approach.

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