What Does EU Deforestation Mandate Delay Mean for Scope 3?

The EU’s plan to enforce its deforestation-free supply chain mandate, originally set for December 2024, has been postponed by one year.

The Regulation on Deforestation-free Products (EUDR), which targets major commodities like beef, coffee and wood, will now be enforced for large businesses by December 2025. Smaller businesses will have until June 2026 to comply.

This delay, driven by political pressure and lobbying from key producer nations, directly affects Scope 3 emissions—indirect emissions from supply chains—where deforestation plays a major role.

Compliance and impact on Scope 3 emissions

The delay in enforcing the EUDR is largely due to challenges around compliance, which significantly impacts businesses’ ability to manage and report on Scope 3 emissions. Under Scope 3, companies are responsible for emissions across their entire value chain, including the environmental impact of raw materials and products sourced from deforested land.

Guidelines crucial for businesses to meet these new deforestation-free standards were only published recently, leaving companies with little time to adapt. Germany’s Chancellor Olaf Scholz was among those pushing for an extension, formally requesting a six-month delay in September to give businesses more time to comply with these new requirements.

Producer countries like Indonesia, a leading supplier of palm oil, also lobbied for leniency, arguing that the regulation would place a heavy burden on smallholder farmers. These small-scale producers are often less equipped to handle complex reporting and verification processes, which are essential for businesses aiming to reduce their Scope 3 emissions linked to deforestation.

For many businesses, deforestation remains one of the largest contributors to their overall carbon footprint. The deforestation-free mandate is designed to help companies reduce these emissions, but the delay complicates immediate efforts. Environmental groups fear this pause will hinder progress towards meeting climate goals.

This extension is seen by critics as a setback for climate action. Human Rights Watch’s senior environment researcher, Luciana Tellez Chavez, voiced strong disappointment: "The decision is a deplorable abdication of leadership in the face of a climate emergency."

Chavez added that strict penalties and binding rules are essential for ensuring that companies comply with environmental standards. "The need for this law is as pressing as ever," she emphasised, highlighting its significance for climate, biodiversity and human rights.

Environmental groups speak out

Environmental organisations are equally disheartened. Julian Oram, Senior Policy Director at Mighty Earth, criticised the delay in no uncertain terms.

"Delaying the EUDR is like throwing a fire extinguisher out of the window of a burning building," Julian said. He warned that this move would lead to continued destruction of tropical forests, threatening local communities and wildlife, while also undermining global climate goals.

Despite the pushback, not all groups see the delay as detrimental. The Forest Stewardship Council (FSC) remains optimistic. They stated that the delay should not be interpreted as a weakening of commitment to the legislation.

Instead, they see it as an opportunity for businesses to continue preparing for compliance. “The world’s forests urgently need protection,” an FSC spokesperson said, encouraging companies to utilise FSC’s solutions to meet the future EUDR obligations.

Meanwhile, Adam Elman commented on LinkedIn that the move was "big (and not necessarily good) news."

Peter Horsten added, "But don’t be fooled by the extra time. This is not the time to sit back. The smartest players will use this window to strengthen their due diligence processes and take the lead on sustainability, rather than scrambling at the last minute."

A wider push towards reducing supply chain emissions

The Regulation on Deforestation-free Products is a central part of the EU’s broader effort to reduce deforestation linked to agriculture and, by extension, address Scope 3 emissions. The EU, as a major consumer of commodities like cocoa, rubber and palm oil, is aiming to reduce its contribution to global deforestation, which accounts for a significant portion of the world’s carbon emissions.

By ensuring products entering the EU market are deforestation-free, the EUDR is designed to cut carbon emissions by 32 million metric tonnes annually.

This reduction is key to the EU's strategy to meet its climate and biodiversity targets, aligning with major initiatives like the European Green Deal. However, the delay has left many wondering whether businesses will now slow their own efforts to tackle Scope 3 emissions, given the extended timeline.

For companies, particularly large corporations, the postponement of the EUDR offers an opportunity to better prepare for compliance.

The extra time may allow for the development of stronger due diligence processes, supply chain transparency and more robust carbon accounting practices. While small businesses have until 2026 to comply, large companies must still lead the way in reducing their supply chain emissions.

The deforestation-free mandate will eventually replace the EU Timber Regulation, which mainly focused on illegal logging.

Under the new law, companies will need to provide traceability for their products and prove that they are not linked to deforestation, which in turn will help mitigate the Scope 3 emissions tied to their supply chains.

Despite the extra time, the regulation is seen as a crucial step for businesses aiming to reduce their environmental impact, particularly in relation to Scope 3 emissions.

As businesses work to navigate these new regulations, they must also remain focused on the broader goal of sustainability—ensuring that their supply chains do not contribute to deforestation and that they reduce their carbon footprint across the entire value chain.

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