The European Union’s Deforestation Regulation (EUDR), designed to prevent deforestation through tighter controls on commodity imports, is encountering growing opposition from both corporate stakeholders and environmental analysts. Central to the criticism is a disparity between how the EU categorizes countries by deforestation risk and the actual deforestation trends observed through satellite and field data.
A prominent example is Malaysia, which is classified as “medium risk” under the regulation. However, data from Global Forest Watch shows that Malaysia lost 0.56% of its remaining primary forest in 2023—compared to Sweden, which lost 0.87% over the same period. Sweden, home to Europe’s largest areas of old-growth forest, retains its “low risk” status by default as an EU member state. Despite this, logging activity in Sweden is proceeding at a pace faster than that of the Amazon rainforest. Neighboring Finland has also received €7 billion in EU fines for deforestation, yet maintains preferential regulatory treatment under the same framework.
Critics argue that such classifications are not anomalies but reflect deeper methodological flaws. The European Commission’s current benchmarking relies on “total forest cover” data from 2015–2020, without distinguishing between primary forests—which are ecologically irreplaceable—and managed secondary forests or plantations. This allows EU countries that have replaced native forests with monoculture plantations to retain “low risk” status, while countries preserving large areas of natural forest are subjected to stricter scrutiny.
EU countries seek more cuts to deforestation rules, letter shows.
Source: Reuters
Read full article: https://t.co/kjZVXgYKCI
Sign up for early access: https://t.co/bMMU89rnh1 #DeforestationFree #SupplyChainTransparency #Agenda2063 #GlobalClimateAction #ForestProtection pic.twitter.com/jDbL1CDnfK— SUSTAINABILITY NEWS AFRICA (@SNAfricaNews) July 8, 2025
Progress unrewarded
Malaysia has made significant strides in curbing forest loss. According to official figures, primary forest loss fell by 57% between 2015–2017 and 2020–2022, followed by a further 13% drop in 2024. As a result, Malaysia is no longer among the top 10 countries for tropical primary forest loss. Yet, these improvements are not reflected in the EU’s classification system, which is based on historical data and does not account for recent progress.
Industry representatives argue that the EUDR’s current structure risks creating unintended trade barriers. Italian coffee brand Lavazza and snack food manufacturer Mondelez International are among the companies calling for a delay in implementation. Mondelez, the maker of Oreo, Cadbury, and Milka, noted that fewer than 20% of cocoa farmers in Côte d’Ivoire have received the traceability ID cards required under the regulation, raising concerns about supply chain disruptions and the exclusion of smallholder farmers.
In contrast, companies such as Nestlé, Ferrero, and Tony’s Chocolonely have voiced support for swift implementation of the EUDR. Analysts suggest these larger firms are better positioned to absorb compliance costs, which average just 0.06% of revenue for large corporations, compared to 0.17% for small and medium-sized enterprises. This differential has led to concerns that the regulation may inadvertently advantage larger players by raising entry barriers for smaller competitors.
Mondelēz wants to delay EUDR, Nestlé doesn’t #EUDR #Mondelez #Nestle https://t.co/n5Xqqi8ia2 pic.twitter.com/AM1irgpcCB
— FoodNavAsia (@FoodNavAsia) July 8, 2025
Beyond economic implications, legal experts warn that the proposed “no-risk” classification for certain countries could violate World Trade Organization rules by creating de facto trade preferences based on geography rather than environmental performance. The concern is that commodities from “medium” or “high risk” countries could be routed through “low risk” countries to avoid scrutiny, undermining the regulation’s core objectives.
Some stakeholders advocate for alternative approaches. The European Forest Institute’s gap analysis of the Malaysian Sustainable Palm Oil (MSPO) certification scheme found it has a “very high degree of convergence” with EUDR requirements, including criteria on legality and zero deforestation. Recognizing such national certification schemes, critics argue, could streamline compliance while supporting sustainable production practices in exporting countries. Yet, the European Union refuses to do so, unlike the UK, which helped it to get access to the CPTPP trade arrangement.
As the EU prepares for the full implementation of the EUDR, the debate continues to intensify. At stake is whether the regulation can balance environmental integrity with scientific rigor and equitable global trade practices. For many, the case of Malaysia versus Sweden encapsulates the broader challenge: aligning policy classifications with actual deforestation outcomes, rather than relying on outdated or overly simplistic metrics.
Coffee maker @lavazzagroup called for the European Union's deforestation law to be delayed by a further year, saying implementation would hurt producers in Africa and Central America and drive up prices.https://t.co/2JF8k8mpEm#sustainability #deforestation #packagedfood #EUDR
— European Supermarket Magazine (@esm_magazine) July 10, 2025