KUCHING: The European Commission’s (EC’s) decision to extend for another 12 months the implementation of the European Union Deforestation Regulation (EUDR) to December 2026 is to allow time to remedy the identified risks.
In letters sent to the European Union (EU) Parliament and Council on September 23, the Commissioner for Environment, Water Resilience and a Competitive Circular Economy, Jessika Roswall, had indicated that the EC’s information system for transactions covered by the EUDR currently is not expected to be able to adequately handle all such transactions.
“Based on the available information, the commission’s assessment is that this will very likely lead to the system slowing down to unacceptable levels or even to repeated and long-lasting disruptions which would negatively impact companies and their possibilities to comply with the EUDR.
“Operations would be unable to register as economic operators, introduce their due diligence statements, retrieve the necessary information for customs purposes where relevant. This would severely impact the achievement of the objectives of EUDR but also potentially affect trade flows in the areas covered by the legislation.
“Despite efforts to address the issues in time for the entry into application of the EUDR, it is not possible to have sufficient guarantees that the IT system will be able to sustain the level of the expected load,” stated the letters,
The one-year postponement of the implementation of EUDR is, therefore, intended to allow time to remedy the identified risks.
With EUDR compliance looming, the EC is now expected to quickly release a “stop the clock” proposal, reported the International Tropical Timber Organisation (ITTO) in its latest Tropical Timber Market Report.
The Malaysian Palm Oil Council (MPOC) has welcomed the delay in the implementation of the EUDR but it questioned the regulation’s viability without a clear implementation path, particularly after companies have invested heavily in the compliance preparation.
This additional one-year period, it said provides a crucial opportunity for the EU to address these concerns alongside significant operational and structural flaws, while recognising the substantial progress Malaysia has made in sustainable palm oil production.
The MPOC has reiterated that the Malaysian palm oil industry has worked tirelessly to transform itself in recent years, implementing robust sustainability frameworks and achieving measurable reductions in deforestation.
Despite these efforts, it pointed out that the current EUDR framework contains numerous operational deficiencies, which fail to reward responsible leadership in sustainable practices.
While the EU has recognised the Malaysian Sustainable Palm Oil (MSPO) certification scheme as a credible standard, the EUDR’s classification system fundamentally fails to reflect environmental performance, said the MPOC.
Malaysia has been classified as “standard risk” despite demonstrating superior deforestation outcomes compared to several EU member states that received “low risk” classifications.
Data from Global Forest Watch clearly demonstrates Malaysia’s exception environmental progress, including reduction of primary forest loss by 57 per cent between 2015-2017 and 2020-2022, and a further decline of 13 per cent was recorded in 2024.
Malaysia fell out of the top 10 countries for tropical primary forest loss for the first time.
“This dramatic improvement reflects Malaysia’s unwavering commitment to forest conservation and sustainable agricultural practices. The country’s progress is further evidenced by declining oil palm expansion rates and the enforcement of the MSPO 2022 standard, which strictly prohibits any conversion of natural forests, protected zones and high conservation value areas after December 31,2019,” according to MPOC.
Responding to the postponement, the Indonesian Government and farm sector showed support but are wary. Indonesian officials outlined concerns around benchmarking, and other processes that are still to come.
