The European Union’s Deforestation Regulation (EUDR) was sold as a bold strike against global forest loss. In reality it will impose significant regulatory compliance costs while producing inconsequential environmental benefit when enforced against countries that pose no deforestation risk. Unfortunately, it is EU consumers who will bear these onerous regulatory costs through increased prices. In practice, EUDR is exactly the kind of blunt, one-size-fits-all over-regulation that former Italian Prime Minister Mario Draghi eviscerated in his 2024 report on EU competitiveness.
EUDR will require companies placing cattle, cocoa, coffee, palm oil, rubber, soy, and wood products on the EU market to prove those goods are “deforestation-free.” The compliance burdens are arduous. Operators must conduct costly due diligence, submit detailed geolocation data for every plot, file statements, and retain voluminous records.
In the U.S.-EU Framework Agreement on Reciprocal, Fair, and Balanced Trade, the Commission acknowledged that the U.S. “poses negligible risk to global deforestation” and committed to “work to address the concerns of US producers and exporters regarding the EU Deforestation Regulation, with a view to avoiding undue impact on US-EU trade.” Seems pretty clear.
Subsequently, and consistent with the Framework Agreement, the European Parliament and Council determined that EUDR “should be simplified and unnecessary regulatory burdens for businesses should be removed”, while maintaining the Regulation’s objectives. The co-legislators directed the Commission to “carry out a simplification review” of the Regulation, “present a report by 30 April 2026”, and “where appropriate, accompany the report with a legislative proposal.” In this respect, the Commission’s “simplification” package simply failed, and the co-legislators should reject its Report.
The EUDR’s most serious problem is that it will create increased costs and delivers negligible environmental benefit when applied to countries that pose negligible deforestation risk. The United States is a prime example. U.S. Forest area has been stable or expanding for decades due to good governance and sustainable practices. The US contributes to forestation rather than deforestation.
Yet, under the EUDR’s current benchmarking, “low risk” American operators will face the same regulatory requirements as “high-risk” operators, burdening billions in trade unnecessarily. This structure also fails to offer any incentive for high-risk countries to reduce their deforestation risks as negligible risk countries incur the same regulatory costs as high-risk countries.
There is a smarter way. The EUDR should exempt from its stringent requirements operators from countries that pose negligible risk to global deforestation and have proven stable forests and good governance – like the United States, Canada, Sweden, and Finland. This would put EUDR’s scrutiny where needed and encourage high risk countries to reduce deforestation risks – while sparing negligible-risk operators and EU consumers pointless costs.
Keep in mind, those onerous compliance costs flow downstream into higher prices for chocolate, coffee, beef, and more. In an era of cost-of-living pressures, every unnecessary euro spent on redundant rules hurts EU households.
The Commission May 2026 “simplification” package does claim that it will slash costs, but that claim deserves scrutiny. Much of the reduction stem from delayed timelines and diluted obligations mainly within the EU, not from easing core extraterritorial demands on non-EU suppliers. Even with these purported reductions, the Commission’s own impact assessment forecasts annual compliance costs will still be a household budget crunching €2 billion.
Making matters worse, this so-called simplification contains a glaring double standard. It eases rules primarily for EU-based small and medium sized enterprises (SMEs), that can now submit simplified one-time declarations instead of full geolocation and repeated due diligence. Downstream EU traders and retailers also gain lighter obligations, with extended deadlines to mid-2027 for many.
But costs for foreign operators remain high as the regulation still demands sophisticated traceability, satellite monitoring, supplier audits, and legal risk assessments across global supply chains. Many operators lack the infrastructure or capital to comply, leading to exclusion or forced reliance on larger intermediaries. The touted savings mask continued burdens exported abroad.
For large firms, these are expensive IT upgrades. For SMEs, they are business killers. Industry analyses show that physical segregation of compliant commodities can add 25% or more to transport and storage costs in some sectors.
Foreign SMEs – family farms, ranchers and cooperatives in developing countries supplying the EU – will still have to navigate the full burden of complex traceability and data requirements to access the market, while their EU counterparts get relief justified by “administrative burden.”
This is not genuine simplification; it is selective protectionism that disadvantages foreign SMEs and tilts the playing field. It is exactly the kind of non-tariff trade barrier the Framework Agreement was designed to eliminate.
Imposing costly, uneven rules on responsible partners is self-sabotage. Both the Council and the Parliament should reject the Commission’s EUDR Report and insist that it propose legislation that exempts operators from countries that pose negligible risk to global deforestation from the EUDR’s stringent and cost increasing requirements. Doing so would honor EUDR’s ambitions without imposing unnecessary costs on EU consumers.
Andrew Puzder is the United States Ambassador to the European Union