But the postponement could also allow time for potential EUDR defects to be addressed. The Rainforest Alliance, for example, which has supported the law from its inception, \u201cdefinitely saw the unintended consequences from the start,\u201d says Fanny Gauttier<\/a>, the NGO\u2019s European public affairs lead.<\/p>\n Prime among those unintended consequences, she says, is the possibility of the EUDR accidentally excluding many of the world\u2019s smallholder farmers. Other experts point to the potential \u201cleakage\u201d of commodities once destined for EUDR nations being shipped to unregulated markets. Add to that land use change in ecosystems beyond forests.<\/p>\n According to EU data, the bloc\u2019s consumption<\/a> of agricultural products contributes roughly 10% to global deforestation, mostly tied to palm oil and soy production. A 2021 report by WWF states that the demand for goods in the EU was responsible for around 16% of tropical deforestation<\/a> resulting in 203,000 hectares (502,000 acres) of lost forest.<\/p>\n A major concern<\/a> among experts is that once enforced, some sellers in tropical nations and elsewhere will simply bypass the EU and find new unregulated markets in which to sell their commodities rather than incur the costs for EUDR compliance.<\/p>\n \u201cThis is probably the biggest risk, because that would essentially mean that the legislation is not having the desired effect on the ground,\u201d he says.<\/p>\n The degree to which market leakage may be a problem is likely to vary by commodity. The EU\u2019s palm oil market, for example, is relatively small and expected to decline in the future there as the oil\u2019s use as a biofuel winds down. That\u2019s why some experts question if the EUDR will make a significant dent in global palm oil-driven deforestation.<\/p>\n Researchers also note that while EU demand for palm oil is declining, global demand is booming. Indonesia, already a major producer, plans to become a significant source of palm oil for biofuels, as does Brazil.<\/p>\n In a paper<\/a> published this year, researchers assessed the impact of market leakage on palm oil and soy supply chains. They found that EU restrictions alone are unlikely to drive any major emission reductions from deforestation in both supply chains. \u201cIf other countries were to adopt similar restrictions, there could be a larger impact,\u201d says Brinda Yarlagadda, an Earth scientist at the Pacific Northwest National Laboratory and lead author of the paper.<\/p>\n She says she believes the policy itself is not enough to significantly curb global deforestation and that \u201cdirect forest protection, stronger financing for conservation and broader partnerships with the folks on the ground could be a more effective approach than this sort of indirect mechanism.\u201d<\/p>\n Another recent paper focused on timber and found that market leakage could ultimately weaken the EUDR\u2019s effectiveness<\/a> due to trade shifts to other noncompliant markets. Similar studies suggest market leakage will lessen the impact in other supply chains such as cocoa<\/a>.<\/p>\n Producers \u201care able to shift trade patterns and essentially circumvent the EUDR to continue to deforest and move those products elsewhere to some degree,\u201d says Craig Johnson, an independent researcher and lead author on the timber paper. \u201cIt would require a policy almost at the [commodity] source to really have a much more meaningful impact on deforestation.\u201d<\/p>\n The EUDR, which exclusively regulates deforestation, could inadvertently increase risk for ecologically sensitive and important non-forest ecosystems, says Matthew Sielski, senior policy adviser of deforestation and trade at The Nature Conservancy<\/a>. This could happen as commodities producers shift pastures and croplands from EUDR-regulated forestlands to unregulated ecosystems, opening the door to ecosystem spillover.<\/p>\n That\u2019s why, almost from its inception, NGOs and experts lobbied for inclusion of other ecosystems, such as grasslands and wetlands<\/a>, in the legislation. (Those ecosystems are included in possible future EUDR regulatory updates).<\/p>\n The EUDR\u2019s \u201cgreater regulatory oversight on forests could potentially result in [commodities] production moving to other natural ecosystems,\u201d notes Sielski, who cites an example where Brazil\u2019s Amazon Rainforest will be covered by the EUDR, but much of the nation\u2019s Cerrado biome, a vast savanna that stores significant amounts of carbon<\/a> and has high biodiversity, is not covered by the legislation.<\/p>\n These two biomes already offer a clear example of ecosystem spillover: In recent years, deforestation has trended downward in the Brazilian Amazon, while spiking in the adjacent Cerrado<\/a>. One reason is a major disparity between land use regulations: Brazil\u2019s 2006 Amazon Soy Moratorium<\/a>, along with the nation\u2019s 2012 Forest Code<\/a> (stipulating Amazon landowners conserve up to 80% of their property in native vegetation, while Cerrado landowners need only conserve 20-35%), has led in part to displacement of vast soy plantations and cattle ranches from the Amazon biome to the Cerrado.<\/p>\n In 2024, a group of NGOs called on the European Union<\/a> to include the Cerrado within the EUDR to prevent spillage.<\/p>\n Another sticking point is the risk of smallholder exclusion. Experts worry that the EUDR, by requiring source traceability using GPS plots and proof of land tenure, could result in smallholder farmers unable to meet these requirements being cut from transnational supply chains, devastating their livelihoods and potentially increasing deforestation.<\/p>\n This could especially impact important smallholder-sourced sectors such as cocoa and coffee, particularly if the onus is put on smallholders to plot, map and prove their land ownership.<\/p>\n \u201cThere are tons of regulatory barriers that will increase [under the EUDR] and farmers will need to have the tools to do that, the support to do that and know-how to do it,\u201d says Janne Bemelmans, a postdoc researcher, at UCLouvain in Belgium.<\/p>\n Government and trade bodies have raised these same issues. Most recently, the Indonesian government<\/a> flagged \u201cserious concerns\u201d that the EUDR will impose a large administrative burden on smallholders.<\/p>\n \u201cThe [EUDR] provisions on smallholders are really scarce,\u201d notes Rainforest Alliance\u2019s Gauttier. Despite some action to increase support to smallholders, she says the legislation is \u201cbasically smallholder blind.\u201d<\/p>\n \u201cThe EUDR has really pushed companies to work on traceability, to build an understanding where their material comes from,\u201d explains Marieke Leegwater, international program coordinator for palm oil at the Solidaridad Network. \u201cWhat you see is the operators importing large volumes [of oil organizing] their value chains now in a way that they reduce buying from smallholders because it brings in more complexity.\u201d<\/p>\n What this will ultimately mean for smallholder livelihoods is unknown, but without support, experts say smallholders will struggle to meet compliance. If left out of big corporate supply chains, smallholders may go their own way, increasing likelihood of their shifting to other crops not covered by the EUDR<\/a>. In some cases, this could increase the risks of deforestation and also child labor.<\/p>\n \u201cIt\u2019s the marginalized groups, ethnic minorities and women\u2019s groups, who will face the largest potential exclusion,\u201d says Martin Greijmans, senior program officer at the Regional Community Forestry Training Centre for Asia and the Pacific. He says he believes that in the palm oil, rubber, and coffee supply chains in countries such as Vietnam, Indonesia, Malaysia and Thailand, the impact will fall on smallholders who \u201ccannot demonstrate that they\u2019re legally producing and where they have no clear [land] tenure.\u201d Similar land tenure issues are likely to arise with traditional and Indigenous landholders in Brazil.<\/p>\n Exacerbating these smallholder concerns is the possibility the EUDR will take an equally blind approach to agroforestry<\/a>, according to Meine van Noordwijk, distinguished research fellow at World Agroforestry.<\/p>\n He worries that the current EUDR deforestation definition<\/a>, if implemented, will result in agroforestry systems being labeled as noncompliant or as high-risk areas. That would exclude established smallholder practices that, in some cases, can be more beneficial for crops and local biodiversity.<\/p>\n In a 2025 paper<\/a>, van Noordwijk and colleagues found that EUDR maps claim there is 12% more forest globally than shown by national data, with some of that forested area under agroforestry production. This data discrepancy could result in \u201ccollateral damage\u201d to agroforestry farmers<\/a>, particularly for commodities including coffee, rubber, and cocoa.<\/p>\n \u201cIf you care about where your coffee, cacao, rubber, etc., comes from, you would quickly see that for some commodities, agroforestry is an important part of the production systems that you\u2019re trying to regulate,\u201d he says. The blindness of the EUDR to farms utilizing agroforestry systems could add to the market leakage problem and undermine deforestation risk reduction.<\/p>\n In Ethiopia, for example, large portions<\/a> of the economically vital coffee crops are produced beneath a forest canopy. But the EUDR\u2019s \u201cdeforestation definition may fail to capture the ecological diversity and functional value of Ethiopia\u2019s coffee-based agroforestry system,\u201d says Markos Makiso, a PhD candidate at Wachemo University, Ethiopia. \u201cEven if [the EUDR] has a positive impact or a positive objective, it may also be exacerbating some risks, some inequalities, rather than promoting sustainable development.\u201d<\/p>\n Gauttier agrees that EUDR implications for agroforestry pose \u201creally a key risk. \u2026 I think everything lies on how you can ground truth satellite data and how companies are ready to invest in verifying the data they receive,\u201d she adds.<\/p>\n \u201cI think this [smallholder and agroforestry] topic has been off radar for quite some time, and now there is more attention to this, and that\u2019s a good thing,\u201d she says.<\/p>\n Whether these many potential problems will be addressed in the final version of the EUDR is unclear. In fact, there are fears that the current political climate could stymie the legislation\u2019s progress, with implementation facing further delays<\/a> or the law undergoing changes that weaken oversight<\/a>. This uncertainty also casts doubt on future protective measures, such as extending the EUDR beyond forests to other ecosystems.<\/p>\n However, experts agree that while far from perfect, the EUDR is extraordinary in its potential to reduce the EU\u2019s deforestation footprint. They also say that solutions abound for existing regulatory shortfalls. Gauttier, for example, notes there are ways to ensure smallholders are included once the bill comes into force, with EU regulators continuing to support the development of national traceability systems for smallholders in source countries.<\/p>\n But ultimately, ensuring smallholder inclusion should be prioritized by companies, she adds. \u201cIt\u2019s really for companies to do that work to ensure that their suppliers, and in particular their smallholder suppliers, have the support they need to collect the data that can help them remain included in supply chains to the EU.\u201d<\/p>\n Crucially, these tracking and support mechanisms should be reflected in the price paid for commodities, ensuring farmers are paid a fair wage. \u201cThe price that is paid to farmers oftentimes doesn\u2019t reflect, or is not commensurate to, the efforts that they have put in place to provide all this data to multiple different systems,\u201d she adds.<\/p>\n Sielski likewise says that if the EU is to prevent deforestation-causing market spillage, it must explore ways to incentivize sustainable agricultural practices.<\/p>\n According to Bemelmans, the EU also needs to work more closely with local governments to help smallholders comply through financial support services and capacity building training.<\/p>\n At risk, Bemelmans adds, is the \u201cgreening\u201d of Europe\u2019s supply chains at the expense of smallholders and their livelihoods. It\u2019s especially important the EUDR \u201csupport the producers \u2026 near the deforestation frontier, as they are the ones that need the most support to have a proper life.\u201d<\/p>\n Banner image: A cocoa pod opened by hand. Exclusion of smallholder farmers from markets, a potential consequence of the EUDR, could result in loss of income leading to environmental harms but also exacerbate existing problems including child labor on cocoa farms. \u201cThese risks are known,\u201d says Rainforest Alliance\u2019s Fanny Gauttier. \u201cThat\u2019s something that we have highlighted many times.\u201d Image by Rainforest Alliance.<\/p>\n Citations:<\/p>\n Yarlagadda, B., Zhao, X., Iyer, G., Wild, T., Hultman, N., & Lamontagne, J. (2025). Emissions leakage and economic losses may undermine deforestation-linked oil crop import restrictions. Nature Communications, 16(1). doi:10.1038\/s41467-025-56693-1<\/a><\/p>\n Johnston, C., Guo, J., & Prestemon, J. (2024). The European Union deforestation regulation: Implications for the global forest sector. doi:10.2139\/ssrn.5066364<\/a><\/p>\n Azevedo, A. A., Raj\u00e3o, R., Costa, M. A., Stabile, M. C., Macedo, M. N., Dos Reis, T. N., \u2026 Pacheco, R. (2017). Limits of Brazil\u2019s forest code as a means to end illegal deforestation. Proceedings of the National Academy of Sciences, 114(29), 7653-7658. doi:10.1073\/pnas.1604768114<\/a><\/p>\n Van Noordwijk, M., Dewi, S., Minang, P. A., Harrison, R. D., Leimona, B., Ekadinata, A., \u2026 Sayer, J. (2025). Beyond imperfect maps: Evidence for EUDR\u2010compliant agroforestry. People and Nature, 7(7), 1713-1723. doi:10.1002\/pan3.70088<\/a><\/p>\n Van Noordwijk, M., Leimona, B., & Minang, P. A. (2025). The European deforestation-free trade regulation: Collateral damage to agroforesters? Current Opinion in Environmental Sustainability, 72, 101505. doi:10.1016\/j.cosust.2024.101505<\/a><\/p>\n Urugo, M. M., Worku, M., Tola, Y. B., & Gemede, H. F. (2025). Ethiopian coffee: Production systems, geographical origin traceability, and European Union deforestation regulation directive compliance. Journal of Agriculture and Food Research, 19, 101695. doi:10.1016\/j.jafr.2025.101695<\/a><\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/Image_8.jpg\")
A Rainforest Alliance team member during a smallholder farmer training session in Ghana. The organization has backed the EUDR as an important tool in promoting traceability in supply chains, says Fanny Gauttier, but it has also flagged potential negative unintended consequences that need to be addressed. Image by Rainforest Alliance.
\nThe risk of market leakage<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/Image_2.jpg\")
A palm oil plantation in Indonesia. Market leakage \u2014 sellers shifting EU-bound commodities to other less regulated markets \u2014 could undermine the effectiveness of the EUDR in some supply chains. Image by Ryan Woo\/CIFOR via Flickr<\/a> (CC BY-NC-ND 2.0<\/a>).
\nThe risk of ecosystem spillover<\/p>\n![\"Agricultural](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/Image_6.jpg\")
Agricultural expansion in the Cerrado savannah biome in Bahia state, Brazil. The EUDR could inadvertently cause ecosystem spillover, as beef and soy producers move their operations from the Amazon\u2019s EUDR regulated forests to the Cerrado\u2019s far less regulated grasslands. The Cerrado holds large stores of carbon underground. Leading campaigners are calling for EUDR inclusion of other biomes. Image by NASA Johnson via Flickr<\/a> (CC BY-NC-ND 2.0<\/a>).
\n\u2018Smallholder blind\u2019<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/Image_4.jpg\")
A farmer spreads cocoa beans for drying in Ghana. The vast majority of cocoa is produced by smallholder farmers. Image courtesy of Rainforest Alliance.<\/p>\n![\"Rubber](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/Image_3.jpg\")
Rubber agroforestry in Indonesia. Concerns are that the deforestation definition used by the EUDR could negatively impact farmers practicing agroforestry, leading to their exclusion from EU commodity supply chains, impacting their livelihoods. Image by Tri Saputro\/CIFOR via Flickr<\/a> (CC BY-NC-ND 2.0<\/a>).<\/p>\n![\"Cocoa](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/Image_5.jpg\")
Cocoa farmers in Ghana. The EUDR may negatively impact smallholders in the supply chains of transnational companies. More support is needed to ensure farmers can comply with regulations, say experts. Image by Rena Singer\/ USAID Land via Flickr<\/a> (CC BY-NC-SA 2.0<\/a>)
\nEUDR: The \u2018greening\u2019 of Europe\u2019s supply chains<\/p>\n![\"Forest-agriculture](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/Image_1.jpg\")
Forest-agriculture frontier in Brazil. The EUDR aims to reduce deforestation linked to a range of agricultural commodity products in the EU\u2019s supply chain. Experts warn that it could come with multiple unintended consequences. Image by Kate Evans\/CIFOR via Flickr<\/a> (CC BY-NC-ND 2.0<\/a>).<\/p>\n