The EU Deforestation-free Regulation (EUDR) is a European policy framework to address and mitigate the environmental impacts of deforestation. It will be enforced beginning December 2024.
Since its approval, this timeframe has raised many concerns in the industry. Agriculture ministers, European Parliament members, and international trade partners have expressed concerns about the regulation’s complexity and its potential impact on global trade. Exporting countries like Brazil, Indonesia, and Malaysia have warned that the EUDR could act as a trade barrier, negatively affecting small farmers and disrupting supply chains.
A recent voice that has also shown concerns has been German Chancellor Olaf Scholz, who has requested to suspend the implementation of the European Union Deforestation Regulation (EUDR). Scholz has raised these concerns directly with European Commission President Ursula von der Leyen, emphasizing the need to resolve outstanding issues.
Additionally, the World Trade Organization’s director general, Ngozi Okonjo-Iweala, has urged the EU to reconsider the regulation’s global trade implications, jeopardizing a trade value estimated at EUR 110 billion.
COPA/COGECA, supported by FEFAC and approximately 20 other EUDR value chain organizations, are currently preparing a follow-up public letter requesting the postponement of EUDR.
EUDR's potential economic impact
FEFAC is providing a first initial overview of the potential EUDR economic impact on the EU feed chain and livestock sector in the context of the current market situation and outlook regarding soybean meal supplies (Q1-Q4 2025), including a first qualitative soy supply chain disruption risk assessment, based on its member experts’ evaluation and membership surveys (situation September 2024).
- Minimal market offers for Q1 2025 deliveries have been submitted to feed compounders by suppliers which is atypical for this period. Currently, the total EU feed market demand for 2025 of approximately 30 million tons of soybean meal cannot be met with EUDR-compliant products, due to the absence of clear operational guidance to soy value chain partners for imports and EU origin.
- Market information received by suppliers indicates extra costs for providing EUDR-compliant soybean meal of 5-10% on top of normal market price quotations.
- The market supply for EU soy demand will be adversely impacted by current EUDR legal uncertainties, leading to a potential supply chain disruption due to the low availability of EUDR-compliant soybean meal that is currently offered and with higher costs linked to transport logistics and warehousing/storage.
- The direct extra cost for EUDR-compatible soy products for feed use in Q1/Q4 2025 is estimated at approximately EUR 750 million-1.5 billion for soybean meal supplies to the EU (both imported and EU origins). This will also lead to higher costs for alternative proteins which are “pegged” to soybean meal quotations.
According to FEFAC, the combined impact of direct extra cost for soy supplies for the EU feed market in Q1/Q4 2025 and the expected higher additional costs for other alternative protein sources, including rapeseed meal, sunflower meal, and amino acids, may reach up to EUR 2.25 billion. This will cause significant adverse economic impacts to the EU livestock sector, seriously undermining its competitiveness in the EU and global markets.
FEFAC’s initial qualitative EU feed supply chain disruption risk assessment for soy deliveries (Q1-Q2 2025) indicates the following EUDR disruption risk classification by origin:
- Low-Medium risk: North America (US & Canada)
- Medium risk: Argentina, Brazil and Paraguay
- Medium-High risk: Ukraine, Serbia and EU origins
- High risk: West Africa (Nigeria), India, China (for specialties like non-GMO and organic soy products)
“As reported in public soy monitoring reports, there is sufficient market availability of certified/verified deforestation-free soy products to cover the needs of the EU feed market. However, the delay in practical guidance in support of EUDR implementation by the European Commission significantly reduces the availability of ‘EUDR-compliant’ products. In addition, the global EU market share for soy usage is less than 15% and falling, meaning soy exporters have sufficient market alternatives,” FEFAC concluded.
