All EU Member States Receive “Low Risk” Labeling, Sparking Dissatisfaction in Indonesia, Malaysia, and Other Countries

The European Commission officially released the results of the EU Deforestation Regulation (EUDR) national risk classification on May 22, and all 27 EU member states were categorized as “low risk,” triggering strong dissatisfaction among major agricultural exporters, including Malaysia, Indonesia and Brazil.

 

The EUDR regulation is designed to prevent deforestation-related products from entering the EU market and covers key agricultural products including palm oil, soybeans, coffee, cocoa and beef. Depending on the risk level, the due diligence obligations that companies will have to fulfill will vary significantly - the higher the risk level, the more stringent the inspections and scrutiny.

 

This risk level has been divided into three categories: high risk, standard risk and low risk. Low-risk countries outside the EU include the US, China, Australia and Canada, while Belarus, Myanmar, North Korea and Russia are categorized as “high-risk” and the rest fall into the “standard” category.

 

Although the categorization has yet to be officially implemented, controversy has already surfaced. Dato' Carl Bek-Nielsen, Chairman of the Malaysian Palm Oil Council, expressed strong dissatisfaction with the EU's decision to give member countries a uniform “low risk” rating, which he described as “clear favoritism”. He said. He pointed out that “the European Commission is well aware that some European countries do not perform better than us in terms of forest protection.”

 

Non-governmental organizations (NGOs) also took issue with this. “Julian Oram, director of policy at Mighty Earth, said it was “absurd” to categorize Canada, Ghana, Papua New Guinea, and Romania as low-risk, arguing that these countries have clear deforestation and degradation problems.

 

Luciana Tellez Chavez, a senior researcher at Human Rights Watch, emphasized that while Malaysia has made progress in controlling deforestation, indigenous peoples continue to face serious violations of their land rights, and “land is often exploited without their consent.”

 

It is worth noting that regardless of the outcome of the classification, companies in all countries are required to provide evidence, such as geographic coordinates, that their production processes do not involve illegal deforestation when exporting the products in question to the EU.

 

The European Commission noted that this risk benchmark release is a key milestone in the implementation process of the EUDR regulation. The regulation will enter into force on December 30, 2025 for large enterprises, and from June 30, 2026 it will be extended to micro, small and medium-sized enterprises.

 

Translated with DeepL.com (free version)