The European Commission is considering a delay in implementation of an anti-deforestation law with implications for U.S. beef and soy producers as it tries to answer myriad questions from trading partners about how such a rule would work.
The EU's executive branch is supposed to begin enforcing the law on Dec. 30, requiring businesses to prove that cattle, cocoa, coffee, palm oil, soy and wood they hope to sell on the European market are not linked to deforestation.
However, the commission is now hoping to stall implementation until the end of 2025 for large companies and until June 2026 for small ones amid uncertainty over exactly what such a rule would require of commodity producers around the world.
"Given the EUDR's (European Union Deforestation Regulation's) novel character, the swift calendar, and the variety of international stakeholders involved, the commission considers that a 12-month additional time to phase in the system is a balanced solution to support operators around the world in securing a smooth implementation from the start," the commission said in a press release.
Both the European Parliament and Commission would need to approve the extension before Dec. 30. Meanwhile, there’s still a lot that U.S. farmers, processors and commodity groups don’t know about how the anti-deforestation law will be enforced, whether they’ll be subject to the same requirements as other countries, and what data they need to provide.
“We know we’re in a good position when it comes to deforestation,” said Rosalind Leeck, U.S. Soybean Export Council executive director of market access and strategy. “We know we’re in a good position when it comes to the legality of production. But the question is when the rubber meets the road, what does that actually look like in practice when you get to when the documents are submitted?”
Rosalind Leeck, USSEC Under the law, exporting countries will be given low-, medium-, and high-risk classifications based on the odds of deforestation occurring within their borders. The U.S., so far, has not been assigned a risk category. Leeck believes it will eventually be deemed “low risk," adding that there’s been “very, very little” recent conversion of forestland to agricultural production.Geolocation will be used to track whether products came from deforested land for every country that does business with the EU, though countries rated higher risk will be subject to more comprehensive checks. Land coordinates and information on types and quantities of products must be provided through “due diligence statements” submitted through an online registry.
Requirements will apply to “each batch of imported, exported or traded commodities,” according to the European Commission's description of the procedures demanded of exporters.
Bulk shipments of commodities like soy sourced from multiple locations in different countries would need data not only from countries of production but also “geolocation information for every single plot of land from all of these countries that has contributed to the shipment.”
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If sourcing information exists for only some of the grain in that shipment, “the non-compliant portion needs to be identified and separated from the rest before the relevant product is placed on the market or exported, and that part may be neither placed on the market nor exported.” If that can’t be done, the entire shipment can’t be placed on the EU market.
When it comes to cattle, data collection can get particularly complicated. Producers must geolocate “all establishments associated with raising the cattle,” including their birthplace, farms, where they were fed, grazing lands and slaughterhouses, according to the EC.
Trying to provide this level of detail could come with added cost, which could sour U.S. producers on the European market, said Kent Bacus, executive director of government affairs at the National Cattlemen’s Beef Association.
The U.S. exported 12,873 metric tons of beef and beef products, worth $289.9 million, to EU member states in 2023, according to Foreign Agricultural Service data. Bacus said most of the beef shipped to the EU comes from non-hormone-treated cattle, which is sold at a premium on the European market. Now, he said, producers will need to weigh whether the added cost of complying with the measure make the premium worth it.
“If this becomes something where it’s cost-prohibitive, then our producers just simply won’t produce for the European market,” Bacus said. “When you look at some of the proposals that are out there as far as geotracking cattle, we don’t have the technology at scale, cost-wise, to incentivize that.”
The U.S. exported $3.5 billion worth of soybeans to the EU in 2023, making it the highest-value agricultural export to that destination. About 6.2 million metric tons of the crop were sent to the EU that year.
The law also applies to products derived from soy and cattle, including soybean oil, soybean meal and leather. The U.S. exported 1 billion metric tons of soybean meal to EU states last year at a value of $562 million, 20,613 metric tons of soybean oil
Kent Bacus, NCBA at a value of $21.6 million, and 791,104 hide and skin pieces at a value of $119 million.
The European Commission's decision to try to postpone implementation of the law comes after Agriculture Secretary Tom Vilsack, Commerce Secretary Gina Raimondo and U.S. Trade Ambassador Katherine Tai requested a delay.
Not only had the EU not established a final version of the system for producers to submit mandatory due diligence statements, but it also had not provided “implementing guidance” or designated a “competent authority” to enforce the rule, the three U.S. leaders wrote in a letter to European Commission Executive Vice President Maroš Šefčovič in May. Additionally, all nations had been given interim “standard risk” classifications regardless of forestry practices.
“Failure to address these issues before the enforcement of the EUDR could have significant negative economic effects on both producers and consumers on both sides of the Atlantic,” they said in the letter, obtained by Agri-Pulse through a Freedom of Information Act request.
Vilsack noted during a Sept. 28 press call that the deforestation rule came up during bilateral meetings with the German agricultural minister at the G7 ministerial summit late last month. He said he suggested that a delay was needed “simply because there’s no distinction between low-risk countries like the United States — where we’re not cutting down trees in order to plant crops — and other countries where that is still an issue.”
In a statement, USDA spokesperson Allan Rodriguez said the agency would “welcome a delay” but “remains concerned” about the law’s impact on U.S. agriculture unless implementation issues are addressed. Agriculture “has negligible impacts on deforestation in the U.S.,” he said.
“As USDA has previously iterated, while we share the European Union's commitment to combating deforestation, any efforts to address this challenge must do so in a way that that is practical and effective and does not create unjustifiable costs on both producers and consumers on both sides of the Atlantic,” Rodriguez said.
One company with a significant U.S. presence has launched a program to help collect the information the EU is seeking. ADM, which produces soybean oil and animal feeds, has partnered with Farmers Business Network, a tech and commerce platform, to create a deforestation-free certification program.
Through the program, farmers submit field boundary maps to FBN, which then uses satellite imagery to ensure the fields were not deforested after Dec. 31, 2020. According to ADM's website, farmers who enrolled before May 1 were also offered a 20-cent-per-bushel premium.
In response to Agri-Pulse questions, Jon Turney, president of ADM's Oilseeds Division for Europe, the Middle East and Africa, said with the December deadline approaching, the company "felt it was important to develop a program that would maintain market access for U.S. soybeans and enable ADM to operate its soybean processing facilities in Europe."
"ADM is uniquely positioned to do this because we work directly with farmers and have the ability to dedicate assets necessary to segregate supplies through the entire value chain," he added.
The program was first launched as a pilot in 2023 and resulted in 2.4 million bushels of "verified, fully traceable soybeans shipped from the U.S. to Europe," he said.
"Although we are confident in the system we have built, we continue to support U.S. government and industry efforts to encourage the [EU] to provide the necessary clarity regarding implementation and adopt practical solutions to ensure U.S. farmers can be part of the solution with limited burden," Turney said. "However, the law has been adopted and time is running out, and we’re preparing to ensure we can continue to support the flow of U.S. soy to Europe."
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