OMNIBUS IV package and EUDR

Tag: Deforestation

OMNIBUS IV package and EU Deforestation Regulation

The EU Commission is currently attempting to streamline and simplify numerous legal acts in an unprecedented campaign.

After the EU Commission presented OMNIBUS I and II packages in February 2025 (see our blog post OMNIBUS initiative and possible adjustments to the LkSG), it followed up with packages III and IV in May 2025. The new packages are all about ‘simplification.’ While Package III focuses on the Common Agricultural Policy and is not covered in this article due to its lack of relevance to product law, Package IV proposes a new category of companies and related simplifications. In addition, the EU Commission wants to digitise the fulfilment of product-related obligations. Although not part of the OMNIBUS initiative but not less prominent, the EU Commission published a revised version of the guidelines and FAQs on the Deforestation Regulation in mid-April. This was followed on 20.05.2025 by the long-awaited ‘country benchmarking’, which assigns a deforestation risk to the countries of origin of the raw materials covered by the EUDR.

This article provides an overview of the intended changes in the OMNIBUS IV package (see A.), explains the implications of the updates to the EUDR (see B.) and concludes with an interim assessment of the EU Commission’s approach following the first four OMNIBUS packages (see C.).

A. OMNIBUS IV package

The OMNIBUS IV package comprises a total of five draft amendments:

In addition to draft amendments to a large number of regulations and directives, the EU Commission has submitted a proposal for the definition of ‘small mid-cap enterprises’ (SMC) in Recommendation C(2025)3500.

According to the recommendation, SMCs are defined as enterprises that

  • are not small or medium-sized enterprises within the meaning of Recommendation 2003/361/EC,
  • employ fewer than 750 persons, and
  • have an annual turnover not exceeding EUR 150 million or an annual balance sheet total not exceeding EUR 129 million.

By introducing SMCs, the EU Commission intends to exempt a larger number of economic operators from regulatory obligations. Against this background, SMCs are to be subject to similar or even the same simplifications as small and medium-sized enterprises (SMEs) for a number of legal acts in future.

The proposed amendments to product-related regulations and directives are outlined below for individual legal acts or groups of legal acts.

I. EU Battery Regulation (Regulation (EU) 2023/1542)

Amendments to the Battery Regulation are provided for in the draft amendments COM(2025) 501 final, COM(2025) 504 final and COM (2025) 258 final. These are as follows:

  • Postponement of the scope of application: The EU Commission proposes an amendment to Art. 48(1) Battery Regulation. According to this, the due diligence obligations laid down in Art. 48(2), (3) and Art. 49, 50, 52 Battery Regulation shall only apply on 18 August 2027, two years later than previously planned.
  • Simplification for SMCs: The exemption of SMEs from the due diligence obligations under Art. 47 of the Battery Regulation is to be extended to SMCs.
  • Reduced disclosure requirements: Economic operators who are required to fulfil due diligence obligations under Art. 47 et seq. Battery Regulation will in future only have to review their strategy and publish it on the internet every three years instead of annually (amendment to Art. 52(3) Battery Regulation).
  • Mandatory online communication: In future, certain information must be provided in digital format and contact with the authorities must take place digitally. As these changes apply to a large number of regulations and directives, they are presented in detail below under B.III.

II. Regulation on fluorinated greenhouse gases (Regulation (EU) 2024/573)

Amendments to the Regulation on fluorinated greenhouse gases (“F-Gas Regulation”) are provided for in the draft amendment COM(2025)501 final. For the import or export of products and equipment containing fluorinated greenhouse gases, registration in the F-Gas Portal is currently required under Article 20 of the F-Gas Regulation. This applies regardless of whether the products and equipment are subsequently subject to further obligations or restrictions under the F-Gas Regulation, which means a high administrative burden to comply with the extensive registration requirements. For this reason, the EU Commission wants to limit registration as a prerequisite for import and export to the following cases:

  • Import and export of fluorinated greenhouse gases
  • Placing on the market of products and equipment that must be reported in accordance with Art. 26 F-Gas Regulation
  • Export of products and equipment in accordance with Art. 22(3) F-Gas Regulation whose function depends on fluorinated greenhouse gases with a global warming potential of ≥1000, from the date of prohibition in accordance with Annex IV F-Gas Regulation.

According to the EU Commission, the changes mean that many SMEs and SMCs will no longer be subject to the registration requirement under Art. 20 F-Gas Regulation.

III. Amendments to various product-related legal acts

With the proposed amendment COM(2025) 503 final, which refers to various directives, and the proposed amendment COM(2025) 504 final, which in turn refers to various regulations, the EU Commission is proposing a series of digitisation measures. This covers in particular the provision of certain product-related information and the exchange of this information with the competent authorities. The following legal acts are affected:

  • RoHS Directive (Directive (2011/65/EU)
  • Electromagnetic Compatibility Directive (Directive 2014/30/EU)
  • Low Voltage Directive (Directive 2014/35/EU)
  • Radio Equipment Directive (Directive 2014/53/EU)
  • Pressure Equipment Directive (Directive 2014/68/EU)
  • Battery Regulation (Regulation (EU) 2023/1542)
  • Ecodesign Regulation (Regulation (EU) 2024/1781)

The following adjustments are proposed:

  • If an EU declaration of conformity or similar document must be included with a product, it must be produced in electronic format and made available via an internet address or a machine-readable code.
  • Every manufacturer must provide a ‘digital contact’ on products placed on the market. A corresponding obligation to provide an electronic address has been in force since 13.12.2024 for non-harmonised consumer products (without ‘CE’). This extended labelling requirement is enshrined in Art. 9(6) Regulation (EU) 2023/988 (the EU Product Safety Regulation or GPSR), i.e. in the manufacturer’s obligations. Electronic addresses have also been implemented for other labelling requirements in the GPSR. In addition, mandatory digital communication between economic operators on the one hand and national authorities on the other is to be introduced in the future. As soon as the ‘European Business Wallet’ is available, the digital address provided there will constitute the ‘digital contact’.
  • Operating instructions for products may, with the exception of safety instructions, also be made available exclusively in digital form in future.
  • Reporting obligations to national authorities, which could previously also be fulfilled in analogue form, may only be fulfilled digitally in future.
  • In future, general specifications are to be used more frequently instead of harmonised standards.
  • An obligation is to be introduced to store information from the EU declaration of conformity on the digital product passport (DPP) if a DPP is required under another regulation.

As shown, the changes proposed by the OMNIBUS IV package are comprehensive. It will be interesting to see to what extent the proposals on digitalisation will be accepted and can pave the way for a transition to the ‘European Business Wallet’. Affected companies should also pay particular attention, as some legal acts, such as the Battery Regulation, are dealt with in several draft amendments and are therefore subject to different legislative procedures.

B. Update on the EU Deforestation Regulation (Regulation (EU) 2023/1115)

According to Art. 29 Regulation (EU) 2023/1115 (EUDR), the EU Commission is to carry out a risk assessment of countries or parts of countries. The assessment relates to the risk that a relevant product listed in Annex I EUDR from the territory concerned violates the prohibition of deforestation under Art. 3(a) EUDR. A distinction is made between three categories:

a. high risk

b. standard risk

c. low risk

The classification of a country or parts thereof has two effects. On the one hand, according to Art. 13 EUDR, in the case of a low risk, reduced due diligence obligations apply to market participants (Art. 2(15) EUDR) and traders (Art. 2(17) EUDR). Subject to an assessment of the risk of circumvention of the Regulation, the obligations under Art. 10 EUDR (risk assessment) and Art. 11 EUDR (risk mitigation) do not have to be fulfilled. However, this means, conversely, that the obligations to obtain information under Art. 9 EUDR and, in particular, to draw up and submit a due diligence declaration remain in place even in the case of a low risk without exception. On the other hand, the frequency of checks by the competent authorities depends on the classification. While in the case of high risk, 9% of market participants who place relevant products on the market or make them available on the market must be checked each year, in the case of standard and low risk, the figures are 3% and 1% of market participants, respectively, cf. Art. 16(8)-(10) EUDR.

The long-awaited categorisation by Implementing Regulation (EU) 2025/1093 now qualifies four countries as high risk (Belarus, Myanmar, North Korea and Russia) and 140 countries (including all 27 EU Member States) as low risk. This classification has been met with some criticism, as the threshold for assuming a high risk has been set very high. This contradicts many reports on deforestation in countries such as Brazil, Indonesia and the Democratic Republic of Congo, which continue to be classified as ‘standard risk’ because all unlisted countries are automatically assigned to the ‘standard risk’ category. However, according to Art. 29(2) of the EUDR, the list is to be reviewed on an ongoing basis and adjusted as necessary.

In addition to country benchmarking, the EU Commission has again updated the guidelines on the EUDR and the FAQs. The following updates are particularly noteworthy:

  • Wood or paper packaging that constitutes a relevant product under Annex I EUDR is not covered by the EUDR if it is only used to support or protect another product. In this case, they function primarily as packaging. However, they are subject to the EUDR in exceptional cases if their supporting and protective function gives the other product its essential character and they can therefore no longer be classified as mere packaging, see No. 2.5 FAQ.
  • Pursuant to Art. 4(9) EUDR, market participants may, when submitting their due diligence declarations, refer to the reference numbers of due diligence declarations that other market participants have already submitted to the information system in relation to the relevant product. This requires a review of the declarations previously submitted. The obligation to “ascertain” that due diligence was exercised in line with the EUDR has now been specified to mean that it refers to the verification of the validity of the respective reference numbers, see No. 3.4 FAQ. Deeper investigations may nevertheless be useful in individual cases, as responsibility for compliance with the requirements under Art. 3 EUDR continues to exist, see Art. 4(10) EUDR.
  • Members of a group of companies may authorise one of their members to submit the due diligence declarations for all members of the group. Although each member of a group of companies remains subject to the Regulation, the submission of the due diligence declaration can now be bundled, see No. 3.13 FAQ.
  • A single due diligence declaration may cover a large number of batches and relevant products in advance in accordance with Art. 4(2) EUDR. It should not exceed batches for a period of one year and should only include products that already exist at the time of submission. However, depending on the supply chain and product, it may be advisable to submit several due diligence declarations to ensure that all products placed on the market are actually covered by a declaration, see No. 5.19 FAQ.

In addition to the EU Commission, the Federal Office for Agriculture and Food published FAQs on 14.05.2025, which clarify a number of issues and should be consulted in particular by German companies.

Interim conclusion on current EU legislative procedures

The current pace at which the EU Commission is initiating new legislative procedures may be driven by a desire to demonstrate its ability to act in crises. However, if this comes at the expense of quality and creates legal uncertainty for the companies affected, this demonstration will unfortunately not be successful. The dilemma is particularly evident in short-term postponements of the date of application of legal acts, such as the EUDR at the end of 2024 and now the due diligence obligations under the Battery Regulation. Even if the intention behind this is to protect companies from excessive burdens, such actions tend to give the impression of an overwhelmed EU that is unable to provide clear regulations and appropriate guidelines from the outset. This damages the image of a European legal community in which legal certainty and clarity are supposed to prevail. Against this backdrop, we can only appeal to legislators to provide companies with more support in implementing the adopted legislation rather than hastily proposing supposed simplifications.

Do you have any questions or would you like to discuss the news with the author? Please contact Michael Öttinger and Paul Jäde.

24. June 2025 Michael Öttinger
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Regulation on deforestation-free supply chains published in the EU Official Journal

On 09.06.2023, Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010 was published in the Official Journal of the EU.

Regulation (EU) 2023/1115 introduces comprehensive due diligence requirements to protect global forests against deforestation and exploitation in connection with the production of various agricultural commodities and products (we have already reported on the due diligence requirements in detail: Regulation on Deforestation-Free Supply Chains). The aim of implementing the due diligence requirements is to ensure that these agricultural commodities and products made from them are not placed on the market if their production has led to deforestation or forest degradation or, in any case, if there is a more than negligible risk of this.

In terms of time, the requirements will enter into force on 29.06.2023 (Art. 38 para. 1) and will in principle be applicable from 30.12.2024 (Art. 38 para. 2). In this context, it should be explicitly noted that the effective date was explicitly not set for 01.01.2025, so that the two days remaining in 2024 from the effective date should be taken seriously, in order to avoid compliance gaps. For companies that were classified as SMEs on the cut-off date of 31.12.2020, the obligations will only take effect from 30.06.2025 (Art. 38 para. 3). With regard to the interaction of the new Regulation (EU) 2023/1115 with the previous Timber Trade Regulation (EU) No. 995/2010, special transitional provisions under Art. 37 of Regulation (EU) 2023/1115 apply.

In connection with the previous Timber Trade Regulation, it should also be noted that in Annex I of Regulation (EU) 2023/1115 a considerable expansion of the timber products covered has been made. This concerns, for example, wood products of CN numbers 4402 (charcoal), 4405 (wood wool; wood flour), 4417 (tools, handles, shoe trees, etc., of wood), 4419 (articles of wood for table or kitchen use) and 4421 (other articles of wood). Consequently, a large number of economic operators related to wood will also be affected in the future, which were previously not within the scope of the due diligence requirements under the Timber Trade Regulation.

Link to the promulgation in the Official Journal of the EU: Abl. v. 09.06.2023 – L 150/206.

Do you have any questions about this news or would you like to discuss it with the author? Please feel free to contact: Michael Öttinger

12. June 2023 Michael Öttinger
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Regulation on deforestation-free supply chains

Given the accelerating pace of climate change and dwindling biodiversity on a global scale, the protection of intact forests is essential for an integrated climate and environmental protection policy. Therefore, there will be comprehensive market bans and due diligence requirements for the protection of global forests in the future at EU level.

In this context, the EU Commission has submitted a Proposal for a Regulation of the European Parliament and of the Council on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010 on 17.11.2021. In this respect, the institutions involved in the legislative process have reached an agreement within only one year. On 19.04.2023, the Parliament has now voted with a broad majority in favor of the regulation in the trilogue version.

A. Background

Every year, approximately 10 million hectares of forest are destroyed worldwide. This corresponds to about one third of the territory of the whole of Germany. As a result, habitats for animals and plants, valuable air and soil purification functions and CO2 storage capacities are lost and there are globally effective, negative effects on the climate. Because consumption in the EU in particular contributes to a not inconsiderable extent to deforestation and forest degradation in all parts of the world, the EU is now trying to put a stop to rampant deforestation. Since the conversion of forests to agricultural land triggers about 90% of deforestation, the focus is on agricultural products and products made from them.
Due to the comprehensive nature of the new regulation on deforestation-free supply chains, Regulation (EU) No. 995/2010, which previously applied only to wood and wood products, is obsolete and therefore repealed. In terms of content, the prohibitions therein will be absorbed into the new requirements, although there will be certain transitional periods in order to avoid temporal regulatory gaps in this context (cf. Art. 35 of the Regulation on deforestation-free supply chains).

B. Products and actors covered

The new regulation will entail market bans and due diligence requirements for the following products and goods made from them: cattle, cocoa, coffee, palm oil, rubber, soy and wood. The specific products covered are further specified in Annex I of the Regulation via references to customs tariff numbers. It should be noted that the regulation will not apply to products made entirely from secondary raw materials, such as wood-based materials made from waste wood.

The main or primary obligated parties (“operators” in the wording of the Regulation) are all companies that make relevant products commercially available for the first time on the EU market or export such products commercially from the EU. The relevant role definition in Art. 2 para. 12 of the Regulation does not initially make any distinction between economic operators located in the EU and those located outside the EU. However, if the economic operator in question is not established in the EU, Art. 7 of the Regulation stipulates that in this case the economic operator established in the EU who makes the covered products available on the EU market for the first time is nevertheless deemed to be the primary obligated party. These primary obligated parties must comply with the core obligations of the new regulation (see below).

Mere traders, who do not also fall under the definition of operators, are to be distinguished. According to Art. 2 para. 13 of the Regulation, traders are all those who make covered products available on the market on a commercial basis. However, it should be noted that traders who are not SMEs within the meaning of Directive 2013/34/EU are considered operators according to Art. 4a para. 2 of the Regulation and must fulfill all obligations in this regard. Ultimately, the trader-specific limited canon of obligations, which includes in particular information procurement and retention obligations, in Art. 4a paras. 3-5 of the Regulation only applies to those traders who fall under the SME definition.

C. Market bans and due diligence obligations

While the German supply chain due diligence act (LkSG) “only” provides for due diligence obligations and does not deny marketability to products manufactured in violation of them, the new Regulation on deforestation-free supply chains provides for a different regulatory system. Therefore, in order to understand the new requirements, it is important to look at the systematics of the legal act and the connecting factors of the respective obligations in an unbiased manner and in the specific context.

The central prohibition norm of the new Regulation is Art. 3, which contains three cumulative requirements that must all be fulfilled for the products to be marketable in this context:

  • Deforestation-free
    The term “deforestation-free” is defined in Art. 2 para. 8 of the Regulation and includes two categories of protection. The first category concerns products that must not contain, be fed with, or be made using commodities produced on land that has been subject to deforestation after 01.01.2021. The second category explicitly concerns products that may not contain wood or be made using wood if the required wood was harvested in a manner that leads to forest degradation after 01.01.2021.
    The so-called cut-off date of 01.01.2021, which extends into the past, is of central importance in this context. While the market bans and due diligence obligations will not be applicable until the start of the new regulation, the cut-off date will extend approximately three years into the past. This is particularly to avoid increased (preventative) logging and forest degradation during the current legislative process.
    In addition, it is noteworthy that for the market bans to take effect, it does not matter whether any deforestation or forest degradation was carried out legally or illegally. In this respect, the EU fears that, in order to protect its own agriculture and forestry, there could be a legislative “race to the bottom” in some countries with regard to national protection standards of forests if products from legal logging and forest degradation were not covered by the traffic bans.
  • Compliance with relevant legal provisions in the country of production
    In addition to the deforestation issue mentioned in the title of the Regulation, the Regulation also contains a somewhat hidden requirement for compliance with “relevant legal provisions in the country of production”. However, a closer look at the topics covered by this Regulation quickly reveals that it covers an enormously broad spectrum of regulatory areas which, when viewed in the light of day, no longer have any (direct) connection with the protection of forests. According to the relevant definition in Art. 2 para. 28 of the Regulation, the economic operators concerned must comply with the requirements from the following areas: land use, environmental protection, forest requirements including forest management and biodiversity conservation, third party rights, labor law, internationally protected human rights, rights of indigenous groups, tax, anti-corruption, trade and customs law. These were significantly expanded in the trilogue version.
  • Submission of a due diligence declaration
    The obligation to submit a due diligence declaration is specified in more detail in Art. 4 para. 2 of the Regulation and applies to all operators designated as primary duty holders. This declaration represents, in terms of products (not solely in terms of roles), the conclusion of the measures to be taken to establish that there is either no risk or only a negligible risk that deforestation or forest degradation has occurred in relation to the products concerned. In this context, the due diligence declaration is not a purely internal document, but must be made available to the national competent authority, which assigns an individual reference number per declaration, in a database yet to be established. The reference number assigned in this context must then in turn be communicated in the supplier communication (Art. 4 para. 8 and Art. 4a para. 3 of the Regulation).

In this context, the legally prescribed due diligence obligations from Articles 8-10a of the Regulation have a much more specific significance than is the case, for example, in the context of the LkSG. In the context of the Regulation on deforestation-free supply chains, the due diligence obligations, according to their conception and system, serve the purpose of proving that the products were produced without deforestation and without forest degradation within the framework of the underlying process. In addition, it is sufficient to prove that there is only a negligible risk that deforestation or forest degradation may have occurred. The heart of the due diligence obligations is certainly the collection of information, which, in addition to a detailed product description, requires in particular that all geodata of the production areas of the products concerned are recorded with longitude and latitude (Art. 9 of the Regulation). On the basis of the information collected, a comprehensive risk analysis based on 14 reference criteria must then be carried out (Art. 10 of the Regulation), the results of which must be documented together with the information bases and submitted to the competent authority on request. In addition, risk minimization measures must be taken if there are indications of a risk that exceeds the level of a merely negligible risk.

Finally, in this context, reference should be made to the newly introduced country benchmarking system in Art. 27 of the Regulation. According to this, the EU Commission is obliged to classify all countries of the world, or even individual regions within individual countries, into one of three categories: low or high risk of deforestation or forest degradation, or standard risk if neither of the other two categories is relevant. The categorizations are to be published in implementing acts and reviewed periodically. In this context, Art. 12 of the Regulation provides for a reduced scope of the due diligence requirements to be applied in the case of a low risk profile, if other conditions are met. In addition, the regulatory control density is based on the risk categories (cf. Art. 14 paras. 9-10a of the Regulation).

Outlook

The main parts of the new Regulation will be applicable 18 months after its entry into force. With an expected entry into force in mid-2023, it is therefore likely that it will apply from the beginning of 2025.

In view of, firstly, the high threat of sanctions (Art. 23 of the Regulation), secondly, the publication of infringements by name, thirdly, a tightly implemented control architecture on the part of the market and the authorities, and finally, fourthly, the increasing popularity of these topics, the companies concerned should take the requirements seriously and start implementing them at the latest as of the publication of the new Regulation in the Official Journal of the EU. Precisely because of the enormously detailed information required, experience has shown that the process of obtaining information will take a great deal of time and will trigger no small need for explanation on the part of suppliers. In contrast to the LkSG, there is also the threat of a severe market ban when the new Regulation comes into force, if it cannot be proven that the products concerned have been produced without deforestation and without forest degradation, or that there is only a negligible risk of this.

Finally, within the first two years after the Regulation comes into force, the EU Commission will review whether it should be extended to other ecosystems and products. This could lead to an extension to other areas shortly after the regulations come into force.

Do you have any questions about this news or would you like to discuss it with the author? Please feel free to contact: Michael Öttinger

19. April 2023 Michael Öttinger
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