The European Union (EU) has postponed the classification of countries under the Deforestation Regulation. This follows claims by the governments of several Asian, African and Latin American countries that the rules would be burdensome and unfair, and would deter investors, three senior European Union officials told the Financial Times.

Brussels will postpone the division of countries into “low, standard or high risk” groups, which was due to be introduced by December under the EU Deforestation Regulation (EUDR). Instead, all countries will be classified as “standard risk” countries, in order to give them more time to adapt to the regulation.

“We simply will not draw up a classification, which means that everywhere will be medium risk – more time is needed to put the system in place,” one of the officials stressed.

“There are a great many complaints from partners. Postponing the strict application of the EU Deforestation Regulation means that no country will have an advantage over any other country.”

The EUDR rules (requirements) apply to palm oil, soya beans, livestock products, timber, cocoa, coffee and rubber. Companies wishing to sell these commodities or products made from them in the EU will have to prove that they do not come from land where forest has been destroyed or degraded since 31 December 2020.

Several developing countries have, however, accused the European Union of imposing its green standards on other countries, according to a report of 8 March. The largest palm oil producing countries, including Indonesia and Malaysia, highlighted “a number of problems” with these rules in a letter to the European Commission in September, the Financial Times notes.

“The legislation fails to take into account local conditions and capabilities, the legislation and certification mechanisms of developing producer countries, their efforts to combat deforestation, and multilateral commitments – including the principle of common but differentiated responsibilities,” the letter states.

Companies had said that they might withdraw from “high risk” regions, because proving that their output does not come from deforested land is too great a burden, while several firms have begun to favour supply deals with large producers that can afford to use sophisticated geolocation technology.

The EUDR is an essential part of Brussels’ plans to achieve net zero emissions in the European Union by 2050. It requires importers to provide geolocation data to prove that their goods have not been brought in from areas where deforestation is taking place. It was originally envisaged that it would operate using a so-called traffic light system, classifying countries as regions of high, medium or low deforestation risk.

The system will use various indicators, such as the level of land degradation and the expansion of agricultural activity, as well as evidence provided by indigenous communities and NGOs. The level of import checks will depend on the classification of the area of origin. European Union customs authorities are expected to check 3% of goods from medium risk countries and 9% of goods from high risk countries.

Officials confirmed that Brussels will take a regional rather than a national approach. This means that, for example, the southern plains of Brazil will be classified as a lower risk area than the Amazon region, where vast areas of rainforest have been cleared, the report says.

One European official noted that slowing down the classification process would not involve changes to the legislation, but that it is “a signal that we do not intend to rush it”.

Developing countries were troubled by the fact that the regulation was adopted last June without clear guidance on complying with it, the report says. Malaysia’s trade minister, Zafrul Aziz, was quoted as saying that his country and others need time and assistance in order to introduce the new control systems.

“You need time, because these standards are expensive to meet, all the transparency or disclosure requirements,” the minister said, adding that for large companies this “will not be a problem, but for many smallholder farmers” it will be difficult to achieve compliance with the rules. Z. Aziz added that Kuala Lumpur is working with Brussels to determine how to implement this law.

The European Commission, for its part, declined to comment.