Deforestation is now the second leading cause of climate change globally, after burning fossil fuels, and is responsible for around 11% of all greenhouse gas emissions.  In the last 60 years more than half of tropical forests worldwide have been destroyed, reducing biodiversity and endangering rare species (see Fifth Special Report of Session – 2023-24:  The UK’s contribution to tackling deforestation: Government’s Response to the Committee’s Fourth Report.)

Commodities such as cattle and palm oil (used in frying fats, chocolate and cosmetics) have been identified as some of the key drivers of deforestation.  From December 2024, the EU Deforestation Regulation (“EUDR”) prohibits the placing on the market or making available in the EU,  certain commodities and products unless they are de-forestation free and produced in compliance with local law.  Stringent due diligence and reporting requirements are imposed on in-scope large and medium size companies and, from 30 June 2025, micro-undertakings and small companies.

The UK is developing its own Forest Risk Commodity (“FRC”) regime: the enabling legislation is set out in the Environment Act 2021 and, through a recent consultation process, the Government has set out the details of the proposed scheme.  This will require secondary legislation which was expected in early 2024, but this has been delayed by the General Election. In this update, we summarise the key design features of the UKFRC and highlight some of the key ways it diverges from the EUDR.

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