EU Expands Deforestation Rules to Palm Oil Derivatives While Removing Leather from Scope

The European Union has introduced new changes to its anti-deforestation legislation, broadening the list of products that must prove they are not linked to forest destruction before entering the European market.

The European Commission announced that additional palm oil derivatives, along with soluble coffee, will be brought under the scope of the EU Deforestation Regulation (EUDR). At the same time, the Commission decided to remove leather, cattle hides, retreaded tyres, soybean seeds for sowing and several industrial products from the regulation.

The updated rules are intended to simplify implementation while ensuring that products capable of contributing to deforestation cannot avoid compliance simply because they are processed further down the value chain.

The new product categories are scheduled to become subject to the regulation from December 2027, giving companies additional time to adapt their supply chains and compliance systems.

Greater scrutiny for palm oil supply chains

The most significant change affects the palm oil industry.

Until now, some oleochemical products derived from palm oil were not covered by the regulation, creating what the European Commission considered a regulatory gap. By extending the law to additional derivatives used in products such as cosmetics, detergents, food ingredients and industrial applications, Brussels aims to ensure consistency throughout the palm oil supply chain.

Companies importing these products into the EU will be required to demonstrate that the raw materials were not produced on land deforested after the regulation's reference date.

Relief for the leather industry

At the same time, the Commission opted to remove leather and cattle hides from the regulation after concluding that their inclusion would have limited environmental benefits while creating additional administrative burdens for businesses. Retreaded tyres and several other industrial products were also excluded as part of a broader effort to simplify compliance.

The revisions follow consultations with businesses, industry associations and public stakeholders aimed at improving the implementation of the legislation without altering its core environmental objectives.

Implications for Latin America

The changes will be closely watched across Latin America, one of the European Union's principal suppliers of agricultural commodities.

Countries including Brazil, Colombia, Ecuador, Guatemala and Honduras export products derived from palm oil, while Brazil is also one of the EU's largest suppliers of coffee, soybeans and beef—commodities already covered by the EUDR.

The broader scope means that more exporters will need to strengthen traceability systems and document the origin of their products to maintain access to the European market.

For producers that have already invested in sustainability certification and supply-chain transparency, however, the revised rules could reinforce their competitive position.

Balancing sustainability and competitiveness

The EUDR remains one of the world's most ambitious environmental trade regulations.

Its objective is to ensure that products consumed in the European Union do not contribute to global deforestation while encouraging more sustainable production practices worldwide.

At the same time, the Commission has sought to reduce administrative complexity by narrowing the list of products where the environmental impact was considered limited and expanding coverage where loopholes could undermine the regulation's effectiveness.

For European companies, the changes require renewed attention to supply-chain compliance.

For Latin American exporters, they reinforce the growing importance of environmental traceability as a prerequisite for accessing one of the world's largest consumer markets.