EU Anti-Deforestation Law Faces ‘Major Loophole’ as Commission Proposes Leather Exemption
The European Union’s ambitious effort to purge deforestation from its supply chains has reached a critical juncture. While the European Commission recently signaled that the core text of its milestone anti-deforestation regulation will remain intact, a new proposal to exclude leather from the law’s scope has sparked concerns over a “major loophole” that could undermine the entire initiative.
The Regulation on Deforestation-Free Products (EUDR), adopted in May 2023, represents one of the most significant environmental mandates in recent history. It requires EU-based companies to verify that their imports and exports are not only deforestation-free but also untainted by human rights abuses. However, as the deadline for compliance approaches in December 2026, the tension between environmental integrity and industry lobbying has come to the forefront.
- Core Law Preserved: The European Commission will not initiate further amendments to the primary text of the EUDR, paving the way for implementation by the end of 2026.
- The Leather Controversy: A draft delegated act proposes excluding leather from the regulation, a move critics say contradicts the law’s goal since leather is a byproduct of cattle ranching.
- Global Impact: The prospect of the law has already triggered reforms, including a moratorium on new oil palm permits in Sarawak, Malaysian Borneo.
- High Stakes: According to Global Forest Watch, the world lost 4.3 million hectares of tropical primary rainforest last year—an area roughly the size of Denmark.
Understanding the EUDR: The Seven Commodities
The EUDR is designed to target the primary drivers of global forest loss. The regulation specifically applies to seven key commodities and their derived products:
- Wood
- Palm oil
- Soy
- Coffee
- Cocoa
- Rubber
- Cattle (including derived products like leather)
By forcing companies to prove their supply chains are clean, the EU aims to stop the flow of products derived from illegally deforested land into the European market. This approach has already seen success; in Brazil’s state of Pará, officials developed the first individual cattle traceability system in the Brazilian Amazon specifically to anticipate EU requirements and similar demands from Asian markets.
The ‘Leather Loophole’ and Industry Pressure
Despite the commitment to the core law, the European Commission opened a public consultation on May 4 for a draft delegated act that would remove leather from the list of covered products. This proposal follows extensive lobbying by leather industry groups.
Human Rights Watch has strongly criticized this move, arguing that excluding leather is logically inconsistent. Because leather is a direct byproduct of the cattle industry, excluding it would create a scenario where beef from cows raised on illegally deforested land is banned, but the leather from those same cows could still enter the EU market.
“It would be absurd to exclude leather from an anti-deforestation law since most of the world’s deforestation is driven by cattle ranching and this industry also produces leather,” said Luciana Téllez Chávez, senior environment researcher at Human Rights Watch. She further noted that the supply chain is frequently linked to “violence against activists, encroachment on Indigenous territories and small-holders and laundering of illegal assets.”
The Role of Italy and Global Meat Giants
The push for the leather exemption is not limited to industry groups. Representatives from Italy—the EU’s largest importer of Brazilian hides—along with officials from Germany and Austria, have previously sought amendments to the regulation. While the Commission rejected attempts to exclude entire jurisdictions with low deforestation rates, the specific focus on leather remains a point of contention.
The urgency of this issue is highlighted in the October 2025 Human Rights Watch report titled “Tainted.” The report found that between 2020 and 2025, JBS, the world’s largest meat company, may have exported both beef and leather hides sourced from illegal ranches in Pará to the European Union. While JBS stated in August 2025 that it would begin tracking indirect suppliers in January 2026, critics argue that without the legal teeth of the EUDR, corporate pledges are insufficient.
Looking Ahead: The Path to 2026
The European Commission’s decision not to reopen the core text of the EUDR is viewed as a positive step toward stability. However, the final outcome regarding the leather exemption remains undecided. EU governments and the European Parliament still hold the power to block the exemption if they determine the Commission has exceeded its authority.
As the December 2026 compliance deadline nears, the global community is watching whether the EU will maintain the integrity of its environmental laws or allow industry interests to carve out exceptions that could jeopardize the protection of the world’s remaining tropical rainforests.
Frequently Asked Questions
What is the EUDR?
The Regulation on Deforestation-Free Products (EUDR) is an EU law requiring companies to ensure that commodities like soy, beef, and palm oil are not linked to deforestation or human rights abuses.
Why is the leather exemption controversial?
Because leather comes from the same cattle that drive deforestation in regions like the Brazilian Amazon. Excluding leather would allow products from deforested land to enter the EU, even if the beef from the same animals is banned.
When does the law take full effect?
The European Commission intends for the regulation to be implemented by the end of 2026, with the compliance deadline set for December.