New Publication Alert: Addressing producer country concerns in the EUDR and beyond

2 July 2025

Colette van der Ven and Sanvid Tuljapurkar

TULIP Consulting

Context

The European Union’s (EU) approach to international forest governance has recently been making headlines again, particularly with the release of the official list of country classifications under the EU Regulation on Deforestation-Free Products (EUDR). In particular, the classification of all EU member states as “low risk” under the EUDR has intensified criticism, with countries like Malaysia accusing the EU of favoritism. Criticism against the EUDR is also coming from within the EU (here, here and here), with agricultural ministries and the EU forest industry advocating for the inclusion of a “no risk” or "negligible risk" category in the EUDR, which would exempt compliant nations from most of the EUDR requirements.  However, as outlined in a legal analysis from TULIP Consulting, adding a "no" or "zero" risk exemption to the EUDR would render the regulation inconsistent with key WTO rules.

As the EU’s approach to forest governance comes under increasing scrutiny, both within the EU and internationally, TULIP Consulting is pleased to share a new publication, commissioned by Fern: Delivering on Forest Governance in a Transactional World: Policy options for von der Leyen II, that focuses on how the Commission can enhance its international forest governance approach to better align with producer country interests, amid shifting global and institutional priorities. As the EU shifts its focus from values to interests, as encapsulated in the Clean Industrial Deal, sustainable forest governance is no longer a priority. However, as the focus shifts towards accessing critical raw materials, clean energy, and technology, as well as new export markets, increasing financial and development assistance to advance sustainable forest practices would lead to a more attractive value proposition for trading partners in the Global South.

Stakeholder perceptions

The report is based on an analysis of the evolution of the EU’s approach to international forest governance, as well as over 40 interviews conducted by the team with stakeholders in key producing countries, including Brazil, Indonesia, Côte d'Ivoire, Cameroon, and the Democratic Republic of the Congo.

While stakeholders acknowledged the urgent need for forest protection, they were critical of the perceived shift in the EU’s international forest protection approach from a more inclusive, bilateral approach under FLEGT towards a more unilateral approach under the EUDR. The shift in the EU’s approach is viewed as a moving target, particularly as producer countries, after investing significant resources to align with EU standards under agreements like Voluntary Partnership Agreements (“VPAs"), feel their efforts are undermined by the sudden imposition of the EUDR, with delays causing further uncertainty. Key stakeholder perceptions can be categorised into the following four key themes:

• Lack of coherence: Stakeholders have pointed to a lack of coherence between EU instruments such as VPAs, Free Trade Agreements (“FTAs”) and the EUDR. The lack of coherence can be attributed to siloed operations among EU institutions, with different Directorates-General (“DGs”) managing separate aspects, such as trade agreements (“DG Trade”), the EUDR (DG ENV), and development cooperation initiatives (“DG INTPA”). The Commission’s proposed organisational structure continues to operate in siloes, further complicating coordination.

• Lack of inclusiveness: Some see the EU’s approach to international forest protection as having marginalised the voices of producing countries. However, others see it as an opportunity to protect indigenous rights and enforce domestic laws. Critics argue that the EUDR lacks fairness by ignoring differing development levels and historical roles in deforestation, and by failing to provide adequate financial and technical support. Initiatives such as the Ad Hoc Joint Task Force on EUDR and the launch of the Strategic Framework are considered insufficient due to vague terminology and a lack of meaningful engagement commitments.

  
  

• Economic impact: The EUDR’s economic impact depends on the exposure of EU trading partners, measured by the share of their covered exports. For countries like Côte d'Ivoire (23.71%), a significant portion of their exports is covered, whereas for larger producers like Brazil (5.6%) and Indonesia (2.89%), the impact is smaller. Even in the case of low EUDR exposure, countries may face a significant impact if they are highly vulnerable and struggle to adapt, as is often the case with value chains that have high smallholder participation and, therefore, capacity and resource constraints. Failure to meet EUDR requirements could exclude smallholders from the EU market. Such exclusion could push them toward deforestation for subsistence farming, thereby worsening environmental harm, as these commodities are their primary source of income.

•  Insufficiently tailored to producer countries/commodities: The EU's "one size fits all" approach has failed to account for the specific characteristics of producer countries and commodities, resulting in inadequate and generalised technical and financial support.

Policy Options

This report outlines three key building blocks of policy options for von der Leyen II to consider, as illustrated in Figure 1 below.

Figure 1: Building Blocks to Redirect the EU's International Forest Governance Agenda

Block 1: Revising the EU Strategy on international forest governance

The Commission’s efforts to improve its approach to international forest governance should start at home. Doing so will require strong leadership to look inward, rethink governance structures and policies, redirect resources as needed, and reestablish priorities. Therefore, the first step should be to develop a coherent EU strategy to guide the Commission’s external action on forest governance in the coming years. This strategy should consist, first, of an improved narrative, which requires adopting a more transactional tone while emphasizing the notion of climate justice and the EU’s responsibility to redress environmental degradation.

Second, it requires developing a comprehensive strategy for forest governance. The Commission can do so by preparing a new communication on global forest governance, to be strategically unveiled during COP 30 in Belem, which will establish EU priorities regarding external action on forest governance.

Third, the Commission must allocate sufficient funding in the multi-annual financial framework. To do so, it must navigate competing budgetary priorities, especially in the area of defence, while addressing decreasing priorities for development aid. Fourth, the EU must break institutional siloes within the Commission to develop a more effective, comprehensive and inclusive approach to forest governance. 

Block 2: Stepping up forest diplomacy through bilateral partnerships

The Commission must also enhance its forest diplomacy by developing stronger bilateral partnerships with key trading partners. These partnerships should be developed to complement the EUDR and would enable the Commission to rebalance the unilateral, demand-focused nature of its current approach to international forest governance. To achieve this, partnerships should be co-developed with partner countries and grounded in a thorough impact assessment. This approach will ensure they align with the partner countries’ priorities and objectives. In practice, following a tailor-made approach to partnerships means that the Commission could select (one or more) the most suitable partnership model(s) – whether from existing frameworks or exploring new ones – depending on the geopolitical importance of the trading partner, the existing trade frameworks and partnerships between the EU and the partner country, exposure and vulnerability to the EUDR, and the importance of forest governance in the producer country (see figure 2 below).

Figure 2: Overview of possible approaches for enhanced EU engagement with trading partners

These partnerships should be based on impact assessments to go beyond a “one-size-fits-all” approach. Impact assessments must map existing partnerships between the EU and the country in question, identifying exposure to the EUDR, as well as the country's vulnerability. Moreover, they must go beyond EUDR compliance and aim to address the root causes of deforestation in a country. Finally, each partnership, regardless of its structure, must include several key elements, including:

• Clear incentives and well-defined targets

• Regulatory compliance

• Adequate financial support

• Technical assistance and technology transfer

• Multistakeholder engagement

• Independent monitoring

Block 3: Enhancing international cooperation on forest governance

The effectiveness of the EU’s approach to addressing global deforestation through the EUDR is limited because it is a regulation linked to EU consumption. Therefore, the Commission should continue to engage in various international efforts, including existing multilateral mechanisms to promote international cooperation on forest protection, such as Nationally Determined Contributions, the Forest Agriculture and Commodity Trade Dialogue, and National Biodiversity Strategies and Action Plans under the Convention on Biological Diversity. Moreover, the Commission must find ways to protect forests and prevent biodiversity loss through international trade by including robust sustainability safeguards in trade agreements. It must also strengthen and support producer countries’ cooperation efforts, such as the Tropical Forest Financial Facility and others. Finally, the 30^th Conference of the Parties of the United Nations Framework Convention on Climate Change might present a strategic opportunity to advance global forest governance, particularly regarding deforestation linked to agricultural production.

You can access the full report here