By Ali Al Zakary – Dubai | May 8, 2026 | 9 min read
European Commission Simplifies Deforestation Regulation (EUDR 2023/1115): Soluble Coffee In, Leather Out, US Demands Rejected
📋 Executive Summary – What’s New in the Simplification?
- ✅ Micro & small operators (under 10 employees or €2M turnover): exempt from geolocation coordinates (postal address accepted).
- ✅ Compliance costs reduced by 75% annually.
- ✅ Soluble coffee (HS 2101 11 00) added to the product scope.
- ❌ Leather (HS 4101, 4104, 4107) temporarily excluded (subject to review).
- ❌ US demand rejected: geolocation still mandatory for low-risk countries (non-small operators).
- 📅 Final deadline unchanged: December 30, 2026.
- 🇺🇸 US exports at risk: estimated $9 billion annually.
Background and Legal Context
Before diving into the details, it is essential to recall that the European Union Deforestation Regulation (Regulation 2023/1115) was amended in December 2025, following requests from member states and the private sector, after it became clear that the original text was so burdensome as to disrupt supply chains. The amendments mandated the Commission to prepare a “simplification review report” to ensure ease of application before the final deadline, which remains fixed at December 30, 2026. This report is what we discuss today.
The Simplification Package – Four Key Pillars
The Commission did not issue a single report but rather an integrated package of four interconnected elements:
- Formal Report to the European Parliament and Council: Describes all measures implemented since June 2023 and estimates a reduction in annual compliance costs for companies by 75%.
- Updated Guidance Document (third edition): Provides practically binding clarifications on the definition of “agricultural use” and the role of certification schemes in risk assessment.
- Revised Frequently Asked Questions (fifth iteration): Addresses marginal cases such as e-commerce, micro and small primary operators, and alternative geolocation methods.
- Draft Delegated Act amending the product scope: Proposes the addition of 17 codes, deletion of 3 codes, and replacement of 1 code.
Radical Change in Product Scope – Soluble Coffee In, Leather Out
This was arguably the most anticipated item. The Commission has developed a hybrid methodology to evaluate each product individually, combining quantitative and qualitative assessments.
Soluble coffee (HS 2101 11 00): The report states that its exclusion had created a “fragmented approach” in the coffee sector, whereby an illegal producer could convert beans into soluble coffee to evade scrutiny. This decision now subjects all forms of coffee (beans, roasted, soluble) to the same standards.
Leather (HS 4101, 4104, 4107): This exclusion surprised the global leather industry. The report gives four reasons: differentiation of the leather value chain from meat value chains, asymmetries in trade flows, relatively low economic value of hides compared to meat, and the risk of creating an unbalanced approach because downstream leather goods remain outside the scope. Warning: This exclusion may be reconsidered if evidence of circumvention emerges.
Summary of HS Code Changes
| Change Type | Number of Codes | Examples |
|---|---|---|
| ✅ Added | 17 | 2101 11 00 (soluble coffee), 0206 21 00 (frozen cattle tongue) |
| ❌ Excluded | 3 | 4101 (raw hides), 4104 (tanned leather), 4107 (finished leather) |
| 🔄 Replaced | 1 | Retreaded tyres replaced with new rubber treads |
New Information System – Grouping Feature and Contingency Plan
- Simplified declaration form for micro and small operators.
- Updated APIs for large companies.
- Detailed contingency plan for system unavailability.
- Voluntary grouping feature: allows companies to group several due diligence statements into one file.
Operator Categorisation – Three Tiers, Different Obligations
| Tier | Description | Key Obligations |
|---|---|---|
| Upstream operators | Producers, large exporters | Full due diligence, geolocation coordinates, statement per shipment |
| Micro & small operators | Fewer than 10 employees or under €2M turnover | One-time simplified declaration, postal address instead of coordinates |
| Downstream operators & traders | Distributors, non-SME retailers | Keep partner records, verify only if substantiated concerns exist |
Low-Risk Countries – Geolocation Not Waived
This is the provision that caused US frustration. Operators sourcing exclusively from “low-risk” countries benefit from partial simplification under Article 13 of the regulation:
- ✅ Relieved of risk assessment (Article 10) and risk mitigation (Article 11).
- ❌ Not relieved of providing geolocation coordinates (unless they are micro/small operators).
Implication for the United States: Even if classified as “low risk” (as recognised by the August 2025 US-EU Framework Agreement), non-small US exporters must still provide geolocation coordinates. Washington has protested this as “burdensome and disproportionate.”
Global Law Repository and Proportionate Evidence
The Commission committed to establishing a central repository of relevant legislation for each producing country, to be ready by December 2026. The repository will cover land use rights, environmental protection, forest-related rules, indigenous peoples’ rights, labour rights, tax, anti-corruption, trade and customs regulations.
Proportionality principle: High-risk supply chains require in-depth, plot-by-plot evidence collection. Areas posing negligible risk (e.g., US, Western Europe) should not be required to systematically collect comprehensive legal documentation.
US Reaction – $9 Billion in Exports at Risk
Washington points out that 36% of US land area (331 million hectares) is forested, and forest carbon stocks increased by 3.6% since 2010. Despite this, US sources estimate that full application of the regulation could negatively affect US agricultural and forestry exports worth up to nine billion dollars annually, including beef, coffee (all forms), cocoa, soybeans, wood, rubber, and derived products.
The August 2025 US-EU Framework Agreement recognised that US production poses negligible risk to global deforestation. However, the May 4, 2026 simplification package contained no response to the core US demand: exempting low-risk countries from geolocation requirements.
Conclusion
In the final analysis, the European simplification package brought:
- ✅ Good news for micro and small operators (75% cost reduction, postal address option).
- ❌ Bad news for the global leather industry (temporary exclusion, subject to review).
- ⚡ Surprise for soluble coffee sector (full inclusion after having been previously excluded).
- 🚫 No news for exporters from low-risk countries (geolocation mandate remains).
The file remains open for further negotiations before the December 30, 2026 deadline. Will Washington accept this “European disregard” or resort to countermeasures? Only the coming days will tell.
❓ Frequently Asked Questions (FAQ)
Q: Has the deforestation regulation been completely cancelled?
A: No. It has been simplified to reduce burdens on small companies. The final deadline remains December 30, 2026.
Q: How do small companies benefit?
A: Companies with fewer than 10 employees or annual turnover below €2 million submit a one-time simplified declaration and may use a postal address instead of geolocation coordinates.
Q: Is soluble coffee now covered by the regulation?
A: Yes. HS code 2101 11 00 (soluble coffee) has been added to close a loophole that allowed circumvention.
Q: Why was leather excluded?
A: Due to the differentiation of the leather value chain from meat, asymmetrical trade flows, low economic value of hides relative to meat, and risk of imbalance. However, the exclusion is subject to review if circumvention evidence emerges.
Q: Did the simplification satisfy US demands?
A: No. The core US demand — exempting low-risk countries from geolocation requirements — was rejected. US exporters (non-small) still must provide coordinates.
Q: What is the final compliance deadline?
A: December 30, 2026. The simplification changed procedures, not the deadline.
✍️ About the author: Ali Al Zakary – Journalist based in Dubai, specialised in European Union affairs and international environmental legislation. He has been covering the EU Deforestation Regulation (EUDR) since 2023 and has published over 30 reports and analyses on its developments and impact on Arab and global markets.
Sources: European Commission package documents (May 4, 2026), August 2025 US-EU Framework Agreement, US Department of Agriculture forest data (2025).
