The problem with the EU’s deforestation regulation

The European Union’s (EU) Deforestation Regulation (EUDR) was adopted in 2023. The stated objective of the EUDR is “to reduce greenhouse gas emissions and biodiversity loss by boosting the consumption of ‘deforestation-free’ products and by reducing the EU’s impact on global deforestation and forest degradation.” Specifically, the European Commission, the executive body of the EU, cites agricultural expansion as the main driver of deforestation. To achieve these objectives, the EU has decided to push consumers toward using more “deforestation-free” products.

As part of the EUDR, all domestic and international operators and traders of certain commodities (e.g., cattle, rubber, and wood), and products derived from these commodities (e.g., chocolate, furniture, leather, and tires), who wish to do business in, or export from, the EU must prepare a due diligence statement showing their products do not contribute to global deforestation.

While the EUDR was adopted in 2023, it has yet to be enforced, partly because regulated parties have found it difficult to comply with the extensive requirements. The rule was originally meant to take effect on December 30, 2024, but was delayed by one year after pushback from regulated parties who needed more time to prepare for the EUDR’s enforcement. In December 2025 it was delayed again for another year. Now, the rule is set to take effect on December 30, 2026, for large and medium operators and on June 30, 2027, for small operators.

The EU should not impose trade barriers to dictate how goods are produced in other countries. Nor should it be restricting consumer choice to further its environmental agenda. Individuals should be free to make voluntary purchasing decisions that best meet their needs, not have the government do so on their behalf. The EUDR is an anti-competitive market distortion that will not only impose major costs on operators across the globe but also raise prices for consumers.

Moreover, the EUDR may do the opposite of what it ostensibly intends to achieve. For example, businesses around the world that engage in practices that benefit forests could find themselves subject to the costs of the regulation. As a result, they could be disincentivized from engaging in these practices. In fact, there are many producers of forest products whose business is built on helping the environment, like the Cow Creek Umpqua Tribe.

The Umpqua Tribe runs a timber enterprise in Oregon that turns post-fire material into high-grade wood chips. Not only does the business create wealth for the tribe, but it helps make the Oregon forests more fire-resistant – a great example of what CEI calls “free-market environmentalism.”

The EUDR is certain to have negative consequences for the Cow Creek Umpqua Tribe and similar groups. This is because the EUDR has extensive requirements that create high compliance costs for small businesses. Such costs could drive the Umpqua Tribe and other groups out of business.

Every forest has unique needs based on a variety of factors. Deforestation might be a problem in some places, but other forests are overgrown. The EUDR could exacerbate problems those overgrown forests face, such as destructive megafires, by discouraging profitable, proactive management like that practiced by the Umpqua Tribe.

It is not the EU’s job to unilaterally dictate land-use practices across the globe through trade coercion. Environmental stewardship is best achieved through well-defined property rights and locally informed land management, not centralized mandates.