The European Union’s decision to delay the implementation of its deforestation law is increasingly seen as a stark illustration of how difficult it has become for Brussels to project its regulatory power beyond its borders. The EU Deforestation Regulation (EUDR), first proposed in 2021, was intended to prevent products linked to deforestation from entering the bloc’s market. Covering commodities such as coffee, cocoa, soy, palm oil, beef and timber, the regulation was designed to use the EU’s market size as leverage to influence global supply chains. After two postponements, the rules are now due to apply from December 2026.
Supporters of the regulation had expected the so-called “Brussels effect” to do much of the work. With the EU accounting for around 30 per cent of global coffee imports and roughly 60 per cent of cocoa consumption, policymakers assumed producers would align their practices with EU requirements in order to maintain access to the bloc’s 450mn consumers.
Instead, the approach has encountered sustained resistance, notes the Financial Times in an expanded analysis.
How the ‘Brussels effect’ backfired https://t.co/jESIzhu9Et
— Financial Times (@FT) December 14, 2025
Growing pushback and implementation concerns
The law, officially known as the EU Deforestation Regulation (EUDR), prohibits the import of products linked to deforested land unless producers can prove their goods are deforestation-free. While Brussels has presented it as a cornerstone of the EU’s climate agenda, the measure has sparked sharp opposition from key trading partners, also the United States,
The Trump administration has joined earlier objections raised under President Biden, calling the EUDR discriminatory and disruptive to global supply chains. A senior EU member state source suggested that recent delays could be due to renewed U.S. pressure, not just technical issues.
Indonesia and Malaysia, major exporters of palm oil, have long argued that the law unfairly penalizes them through heavy reporting demands and risk classifications. Malaysia, which has been labeled a “standard risk” country compared to the U.S.’s “low risk” status, has criticized what it sees as double standards. This especially given the fact that national deforestation fell by 13 percent last year — progress recognized by NGOs — yet their exports still face tighter scrutiny.
Malaysia lost just 0.56% of its remaining primary forest in 2024, according to Global Forest Watch. That is less than Sweden’s 0.87% loss. Sweden holds the largest share of ‘old growth’ forest in Europe, with 70% of its landmass still forested, yet it is clearing these ancient woodlands at a faster pace than the Amazon rainforest. Despite this, Sweden automatically qualifies for “low risk” status by virtue of being an EU member.
MSPO began as a voluntary scheme in Malaysia, the world’s second-largest palm oil exporter, and became mandatory in January 2020, with independent third-party audits ensuring compliance. According to the certification body, MSPO “gives buyers and regulators the confidence that certified palm oil is legally sourced and deforestation-free,” while its digital tracking system “enables full supply chain visibility and strengthens trust among global stakeholders.”
In an attempt to ease tensions, the EU did agree to recognize the Malaysian Sustainable Palm Oil (MSPO) certification as a credible standard for demonstrating compliance with the deforestation law. The MSPO certification body said its system gives buyers and regulators confidence that certified palm oil is legally sourced and deforestation-free, adding that its digital tracking system ensures full supply chain visibility and builds trust among global stakeholders. It also mentioned that MSPO gives buyers and regulators the confidence that certified palm oil is legally sourced and deforestation-free, adding that its digital tracking system enables full supply chain visibility and strengthens trust among global stakeholders, Reuters reports.
As the original deadline approached, objections emerged from industry groups, trading partners and several commodity-producing countries. Critics argued that the EUDR’s due-diligence and traceability requirements were complex, costly and difficult to implement, particularly for smallholders. Some governments warned the rules could disrupt trade without delivering proportional environmental benefits.
The European Commission responded by delaying the regulation’s entry into force, citing the need to give companies and authorities more time to prepare. The decision was welcomed by parts of industry but criticised by environmental groups, which warned that postponement risked undermining the EU’s climate credibility.
Brazil’s ambassador to the EU, Pedro Miguel da Costa e Silva, described the repeated delays as an example of how far Brussels could go in seeking to regulate global production patterns before encountering political and economic limits.
A broader shift in regulatory momentum
The EUDR delay has come amid a wider reassessment of the EU’s regulatory agenda. During Ursula von der Leyen’s first term as Commission president, the bloc advanced an ambitious programme of legislation covering climate policy, digital markets, supply-chain responsibility and corporate sustainability. The European Green Deal was framed as a central pillar of the EU’s economic and geopolitical strategy.
In von der Leyen’s second term, the emphasis has shifted. Policymakers have spoken more openly about regulatory burden, competitiveness and the need for “simplification”, while investment priorities have increasingly focused on industrial resilience and defence.
Against this backdrop, the deforestation regulation has taken on symbolic significance beyond its immediate policy objectives.
FLA: The EUDR delay shows the rule is unworkable, infringes on private property rights, and creates unnecessary barriers for U.S. forest landowners. pic.twitter.com/J1DqeF8uKt
— Forest Landowners Association (@ForestLandowner) November 26, 2025
The Brussels effect under examination
The term “Brussels effect”, coined by Columbia University law professor Anu Bradford, describes the tendency of EU regulations to become global standards as companies adjust their practices worldwide rather than maintain separate systems for different markets.
That dynamic, Bradford argues, still exists but is being tested. She has pointed to growing resistance from major trading partners, alongside a more cautious attitude within the EU itself towards expansive rulemaking.
Earlier examples, such as the EU’s data protection rules under the GDPR, were adopted widely by multinational companies and influenced legislation elsewhere. More recent initiatives, including in areas such as artificial intelligence, digital competition and sustainability, have faced a more fragmented global response.
Delays beyond deforestation
Deforestation is not the only policy area where EU ambitions have run up against practical constraints. New medical device regulations have been slowed by capacity shortages among certification bodies. Proposed reforms to chemical regulation under REACH have been revised and delayed following concerns from industry about costs and investment.
In each case, critics argue that the EU has underestimated the complexity of implementation, while supporters maintain that high standards remain necessary and influential, even if they take longer to embed.
An evolving model rather than a retreat
Despite the challenges, there is evidence that the EU continues to shape global policy debates. The bloc’s carbon border adjustment mechanism (CBAM), which begins its next phase in 2026, has prompted other economies to accelerate work on carbon pricing. Several countries have adopted or adapted elements of EU digital regulation.
From this perspective, the EUDR delay is not necessarily seen as a failure, but as part of a broader evolution in how EU regulatory influence operates — less automatic, more contested, and more dependent on coordination with partners.
As former Italian prime minister Enrico Letta has argued, the Brussels effect remains a feature of the global regulatory landscape, even if its mechanisms are changing. The deforestation regulation, and the debate surrounding its postponement, has become one of the clearest current examples of that transition.