The EUDR Exit: Why Smart Tanneries Aren't Relaxing Just Yet

It's May 2026. The European Commission has formally proposed removing leather from the EU Deforestation Regulation scope. After four years of lobbying by COTANCE and UNIC — over 22 meetings with EU lawmakers — the exclusion is finally on paper. The consultation closes June 1. Nothing is signed. And even if it passes, what you do in the next 90 days matters more than the regulation itself.

## Why This Isn't Over Yet

The proposal to exclude leather from the EUDR is not a done deal. According to leathermag.com (May 2026), the draft Delegated Act is currently open for public consultation until June 1, 2026. Only after the Commission formally adopts it does the exclusion become legally binding. The EUDR application dates remain unchanged: December 30, 2026 for large companies, June 30, 2027 for SMEs. If the exclusion passes, those deadlines become irrelevant for leather. If it doesn't, you're seven months from full compliance requirements.

What complicates the picture further: even if leather exits EU regulation, your commercial reality doesn't follow. Brands — particularly in automotive, luxury fashion, and premium footwear — have built their own supply chain due diligence frameworks that go well beyond EU law. They've been asking for traceability documentation for years, and those requirements don't evaporate because Brussels issued an exemption. I've seen this pattern before. A regulation softens, procurement teams relax, documentation gaps open. Then the next rule arrives and everyone scrambles to rebuild what they let slide.

## What the Numbers Are Actually Telling You

While the EUDR debate dominated industry headlines, two other pressures have been building simultaneously and deserve your attention.

US tariffs are expected to push leather goods prices up roughly 22% over the next 12 months. That's not an abstract market number — it's pressure that works through the entire value chain. At the same time, the US cattle herd sits at its smallest point since the 1950s. Drought, rising feed costs, and sustained herd liquidation have reduced the global supply of quality hides. Fewer hides available, higher tariffs on what moves internationally, and REACH chemical restriction compliance adding cost at the production level. Three forces converging at the same time.

If you source South American hides, the EU-Mercosur trade deal creates some tariff relief worth examining now. If your sourcing is North American-heavy, the outlook for the next 12 months is tighter than the EUDR news would suggest. The tanneries that will navigate this well are those who secured long-term supplier agreements in the last two quarters — not those who are scrambling to renegotiate contracts in the second half of 2026.

## Three Moves Worth Making Regardless of the Outcome

In twenty years in this sector, I've watched the same mistake repeat itself after regulatory uncertainty resolves: people stop doing the things that were keeping them sharp. Here's what I'd recommend regardless of how the EUDR consultation ends.

Keep your supplier documentation current. The traceability work you've done has commercial value beyond any single regulation. Brands won't drop their internal supply chain policies because EU law changed. Your documentation is now a competitive differentiator — treat it as one.

Lock in consumable supply agreements this quarter. Chemical supply is tightening. If you're running significant volumes of tanning chemicals, shaving blades, or felts, this is the right moment to renegotiate or extend contracts before costs climb further into the second half of 2026.

Review your machinery compliance readiness. REACH's new restrictions on tanning chemicals mean some older process configurations may need adjustment. That includes the machinery around them. A process review now costs less than an emergency retrofit in six months.

The EUDR news is real progress for the industry. But the window between "regulation changes" and "everything goes back to normal" is where the most avoidable losses happen. Use this moment to consolidate, not to relax.

If you want to run through what this means for your specific setup — sourcing origins, machinery age, current supplier contracts — I'm available. Write me.

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