POLICY & REGULATION · 7 min read
Sri Lanka Is on the EU’s Low-Risk Deforestation List — and Part of Its Rubber Product Range Was Cut From the Rules in July
Every local report on the EU Deforestation Regulation has framed it as a threat to Sri Lanka’s rubber exports. Two things have happened since that framing set: the European Commission benchmarked Sri Lanka as a low-risk country in May 2025, and on 13 July 2026 it adopted an act removing articles of vulcanised rubber, conveyor and transmission belts and most retreaded-tyre lines from the regulation’s product list. Neither has been reported here. Both matter before 30 December 2026 — and neither means the work is over.
By the ESGNexus Editorial Team · August 2026 · Estimated reading time: 7 minutes
KEY TAKEAWAYS
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On 30 December 2026, the European Union begins enforcing a regulation that requires anyone placing rubber, or a product made from it, on the EU market to prove it did not come from land deforested after 31 December 2020. Sri Lanka’s rubber product exports were worth US$945.73 million in 2025, making them the country’s fifth-largest merchandise export line, and the EU is the country’s largest single export destination, accounting for roughly 24% of the total. The stakes are not in dispute.
What is missing from the local conversation is that two of the most consequential decisions about how the regulation will land on Sri Lankan rubber have already been taken in Brussels, and both run in exporters’ favor. This article sets out what each does, what it does not do, and where the evidence stops.
What Low Risk Actually Buys — and What It Does Not
Regulation (EU) 2023/1115, the EU Deforestation Regulation (EUDR), sorts producer countries into three risk bands. Commission Implementing Regulation (EU) 2025/1093 of 22 May 2025 published the list. Its Annex names the countries considered low-risk and the countries considered high-risk; Article 2 states that a standard level applies to every country not listed. Sri Lanka appears on the low-risk list. The high-risk list has four entries: Belarus, the Democratic People’s Republic of Korea, Myanmar, and the Russian Federation.
The consequence is set out in the Commission’s own guidance, Commission Notice C/2026/3896 of 20 July 2026. Operators sourcing from low-risk countries are not required to fulfill the obligations under Article 10 and Article 11 — the risk assessment and the risk mitigation — provided they have ascertained that all relevant commodities and products they place on the market or export have been produced exclusively in such countries. That is a real reduction. Articles 10 and 11 contain the substantive supply-chain investigation.
Three qualifications follow directly from the same guidance, and a Sri Lankan exporter should read them before the relief.
- The relief belongs to the EU operator, not to the exporter. The importer or first placer on the EU market is the one whose Article 10 and 11 duties fall away. The exporter’s role—supplying the information that enables the operator to file—does not change.
- Article 9 information requirements remain in full. The operator must still collect documents and data from suppliers, including plot-level geolocation of production and the date or period of production, and must still operate a due diligence system under Article 12. Sri Lankan geolocation data is still required.
- *The word is exclusively.* An operator whose product mixes Sri Lankan rubber with rubber of unknown or standard-risk origin does not qualify. The guidance also requires an assessment of supply-chain complexity and the risk of circumvention or mixing, and it reinstates the full Article 10 and 11 duties for any relevant new information indicating that a product is at risk of non-compliance.
In practice, low risk turns the EUDR into a paperwork exercise for the EU buyer — but only if the Sri Lankan supply chain can produce clean, exclusively Sri Lankan, geolocated data. That is a traceability question, and it is unchanged.
Source: Commission Implementing Regulation (EU) 2025/1093, 22 May 2025, Annex and Art 2 — eur-lex. europa.eu; Commission Notice C/2026/3896, Guidance document for Regulation (EU) 2023/1115, OJ 20 July 2026 — eur-lex.europa.eu
The July Scope Cut: What Left, and What Stayed
The EUDR does not cover rubber as a substance. It covers a list of customs headings in Annex I, and a product is in scope only if its code is on that list. As adopted, the rubber section ran from natural rubber (4001) through to hard rubber (ex 4017), including belts, tyres, inner tubes, gloves, and other vulcanised articles along the way.
On 13 July 2026, the Commission adopted a delegated act amending that list, alongside an implementing act on the EUDR Information System. Its own announcement lists the removals: cattle hides, skins and leather; retreaded tyres; soybeans for sowing; articles of vulcanised rubber; conveyor and transmission belts; and aircraft and motor vehicle seats. It also adds soluble coffee, certain palm oil derivatives, frozen cattle tongues, and certain soaps, which become subject to the regulation from 30 December 2027.
For rubber, the effect of heading is set out below. The HS-level detail is a law-firm reading of the annex to the act and is flagged as such.
| Annex I entry | Status after the 13 July 2026 act | What it covers |
| 4001, ex 4005–4008 | Remains in scope | Natural rubber; compounded, vulcanised, unvulcanised and processed rubber in primary forms, plates, sheets, strips, rods and profiles |
| ex 4010 | Removed | Conveyor and transmission belts of vulcanised rubber |
| ex 4011 | Remains in scope | New pneumatic tyres of rubber |
| 4012 (heading) | Narrowed to one line | Retreaded and used tyres, solid tyres. Only one eight-digit line survives; the Commission’s staff working document says the only thing still caught is new rubber tread imported as a standalone product for application to a casing inside the EU |
| ex 4013 | Remains in scope | Inner tubes |
| ex 4015 | Remains in scope | Apparel and clothing accessories of vulcanised rubber, including gloves, mittens and mitts |
| ex 4016 | Removed | Other articles of vulcanised rubber |
| ex 4017 | Remains in scope | Hard rubber and articles of hard rubber |
Source: European Commission, ‘Commission updates product scope and tools to support EUDR’, 13 July 2026 — environment.ec.europa.eu; Commission Staff Working Document SWD(2026)194 — eur-lex.europa.eu; original Annex I entries from a clean reproduction of Regulation (EU) 2023/1115 Annexes I and II hosted by HAPIH — hapih.hr; HS-code detail of the removals per Linklaters Sustainable Futures, July 2026 (secondary).
Two things about that table deserve emphasis. First, the two rubber lines most likely to matter commercially to Sri Lanka — new pneumatic tyres and gloves — are untouched. Anyone reading the July act as a general reprieve for rubber has misread it. Second, the retreading cut is not a rounding error: the Commission’s staff working document reasons that only around 25% of a retreaded tyre, the new tread, falls within the EUDR’s logic, that this fraction is only about 20% natural rubber, and that retreading extends tyre life and should not be discouraged. The Commission’s own estimate for the full package of removals, across all commodities, is roughly EUR 2.5 billion in annual import value on a 2015–2020 basis, representing about 40.9 thousand hectares of deforestation footprint.
What ESGNexus has not been able to confirm from a primary source is the exact eight-digit description of the line that survives in heading 4012, and therefore whether solid tyres — a significant Sri Lankan product — are inside or outside the surviving line. The staff working document’s own language points strongly to a standalone new thread only. We are not printing a conclusion on solid tyres until the Combined Nomenclature entry has been checked.
The Caveat: An Act That Is Adopted but Not Yet in Force
A delegated act adopted by the Commission is not law until the European Parliament and the Council have had their chance to object. Under the standard procedure, the scrutiny period is two months from notification, extendable by a further two months at either institution’s initiative. Neither can amend the text; each can only veto it. If neither objects, the act is published in the Official Journal and the amended Annex I takes effect.
Two months from 13 July 2026 is 13 September 2026. As at 16 August 2026, ESGNexus has found no record of an objection from either institution. That is an absence of evidence, and it is stated as such.
| Date | What happens |
| 22 May 2025 | Commission Implementing Regulation (EU) 2025/1093 publishes the country benchmarking list. Sri Lanka is low risk. |
| December 2025 | Regulation (EU) 2025/2650 amends the EUDR, moving the application date to 30 December 2026. |
| 4 May 2026 | Commission publishes its simplification package, including a draft delegated act on Annex I and the fifth iteration of the EUDR FAQ. It estimates a reduction of about 75% in annual compliance costs against the original regulation. |
| 18 June 2026 | EU-funded Green Recovery Facility, implemented by Expertise France, launches EUDR training for around 280 stakeholders across Sri Lanka’s rubber value chain. |
| 13 July 2026 | Commission adopts the delegated act amending Annex I and an implementing act on the Information System. Scrutiny period begins. |
| 20 July 2026 | Commission Notice C/2026/3896 publishes the updated guidance, including the treatment of low-risk sourcing. |
| 13 September 2026 | The two-month scrutiny period ends, unless extended. Absent objection, the amended Annex I proceeds to publication and takes effect. |
| 30 December 2026 | EUDR applies to large and medium operators, all traders, and micro and small enterprises for products previously under the EU Timber Regulation. |
| 30 June 2027 | EUDR applies to natural persons and micro-enterprises for the remaining products. |
| 30 December 2027 | Products added by the July 2026 act — soluble coffee, certain palm oil derivatives, frozen cattle tongues, certain soaps — come into scope. |
Source: European Commission Access2Markets, ‘Delay until December 2026 and other developments in the implementation of the EUDR’ — trade.ec.europa.eu; European Commission press release IP/26/941, 4 May 2026 — ec.europa.eu; EEAS, Delegation of the EU to Sri Lanka, 18 June 2026 — eeas. europa.eu; scrutiny procedure per Linklaters Sustainable Futures, July 2026 (secondary).
The practical reading is the one every EU law firm gives its clients: plan on the adopted text and treat it as provisional until it is published. Do not stop collecting supply-chain data on a product line on the strength of an act that could still, in principle, be objected to.
Why No One Here Has Reported This
Sri Lankan coverage of the EUDR — the Sunday Times in March 2024 and September 2025, EconomyNext, and the Ministry of Foreign Affairs advisory page — frames the regulation as a market-access threat that the rubber sector must scramble to meet. That framing was accurate when it was written. It has not been updated for the May 2025 benchmarking decision or the July 2026 scope amendment. ESGNexus searched for local reporting of either fact and found none.
As a result, the sector is being told, in effect, to prepare for the hardest version of the regulation. That is not the version that will apply. The one that will apply is lighter on the EU buyer’s side, narrower in product terms, and still entirely dependent on the availability and cleanliness of Sri Lankan geolocation data.
The one piece of official Sri Lankan activity that does reflect the current state of play is the EU-funded readiness programme announced by the EU Delegation on 18 June 2026. Under the Green Recovery Facility, implemented by Expertise France within Global Gateway, around 280 stakeholders across the rubber value chain are to be trained through a three-and-a-half-day training-of-trainers programme, with plantation-to-export traceability as the stated objective. The Secretary of the Ministry of Plantation and Community Infrastructure, Gunadasa Samarasinghe, framed it as ensuring the sector remains competitive and well-positioned to respond to evolving sustainability expectations. Traceability is the correct target. It is the one obligation the low-risk benchmark does not lift.
| have been produced exclusively in such countries — Commission Notice C/2026/3896, on the condition for low-risk simplified due diligence, OJ 20 July 2026 |
What a Sri Lankan Rubber Exporter Should Do Before 30 December
1. Map every export line to its Annex I status. Use the customs heading, not the product name. Gloves and new pneumatic tyres are in. Vulcanised rubber articles and belts are out once the July Act takes effect. Anything in heading 4012 requires the eight-digit line to be checked against the amended Annex, not assumed.
2. Tell your EU buyers Sri Lanka is low risk — with the citation. Commission Implementing Regulation (EU) 2025/1093, Annex. Many EU operators run standard-risk due diligence on every origin by default. A supplier who can point to a low-risk listing and demonstrate exclusive Sri Lankan sourcing removes the buyer’s Article 10 and 11 workload.
3. Treat geolocation as the deliverable, not the relief. Article 9 data—plot-level coordinates and production dates—is required for low-risk products exactly as it is for standard-risk products. If the plantation-to-factory chain cannot produce it, the low-risk benchmark does not help.
4. Keep the ‘exclusively’ condition in view. Any blending with imported or unknown-origin rubber, or any product line that mixes origins, drops the buyer back into full due diligence. Segregation is worth documenting.
5. Do not act on the July removals until 13 September has passed. Continue data collection on all lines until the amended Annex I is published in the Official Journal. If an objection is raised, the current Annex remains in effect.
6. Read this with the packaging and reporting pieces. The EU Packaging and Packaging Waste Regulation applies from 12 August 2026 to the packaging your product ships in, and the revised European Sustainability Reporting Standards govern what your EU customers must disclose about their supply chains. All three land on the same export file.
What ESGNexus Will Track Next
This article describes obligations, not readiness. No exporter, the Rubber Development Department, or the Sri Lanka Association of Manufacturers and Exporters of Rubber Products has yet been asked whether plot-level geolocation exists across the smallholder-heavy upstream. That is the follow-up, and it is a reporting job rather than a research one. ESGNexus will also record the outcome of the scrutiny period on 13 September 2026, confirm the surviving line in heading 4012 against the Combined Nomenclature, and note EUDR readiness where it appears in the SLFRS S1/S2 disclosures of listed rubber and plantation companies in the Sustainability Index.
Sources & Further Reading
European Commission, Access2Markets, “Delay until December 2026 and other developments in the implementation of the EUDR”, 2026 — trade.ec.europa.eu
European Commission, press release IP/26/941, “Commission simplifies EU Deforestation Regulation”, 4 May 2026 — ec.europa.eu
Commission Implementing Regulation (EU) 2025/1093 of 22 May 2025, country benchmarking under Regulation (EU) 2023/1115 — eur-lex. europa.eu (CELEX 32025R1093)
Commission Notice C/2026/3896, “Guidance document for Regulation (EU) 2023/1115 on deforestation-free products”, OJ 20 July 2026 — eur-lex. europa.eu (CELEX 52026XC03896)
European Commission, “Commission updates product scope and tools to support EUDR”, 13 July 2026 — environment.ec.europa.eu
Commission Staff Working Document SWD(2026)194 on the EUDR product scope, 2026 — eur-lex. europa.eu (CELEX 52026SC0194)
European Commission, EUDR Frequently Asked Questions, 5th iteration, 4 May 2026 — environment.ec.europa.eu
Regulation (EU) 2023/1115, Annexes I and II, clean reproduction hosted by HAPIH (Croatian Agency for Agriculture and Food), 2025 — hapih.hr
Linklaters Sustainable Futures, “EU Deforestation Regulation: Commission adopts Delegated Act on product scope and Implementing Act on the Information System”, July 2026 — sustainablefutures.linklaters.com (secondary)
Sri Lanka Export Development Board, “Sri Lanka’s export performance exceeded US$17.2 billion in 2025”, 2026 — srilankabusiness.com
EEAS, Delegation of the European Union to Sri Lanka, “Sri Lanka’s rubber industry prepares for EU Deforestation Regulations through EU-funded capacity building”, 18 June 2026 — eeas.europa.eu
Sunday Times, “Is Sri Lanka ready for the EU’s new deforestation rules?”, 14 September 2025 — sundaytimes.lk
EconomyNext, “EUDR in 2025: Is Sri Lanka ready for the EU’s new deforestation rules?”, 2025 — economynext.com
ESGNexus, “EU PPWR packaging rules and Sri Lankan exporters”, 6 August 2026 — esgnexus.lk
ESGNexus, “Revised ESRS and Sri Lankan exporters”, 2 August 2026 — esgnexus.lk
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Data disclaimer: Information in this article is sourced from publicly available documents. ESGNexus does not independently verify company disclosures. Errors and omissions excepted.