🔗 Share this article

Widely celebrated as a landmark piece of legislation that would curb the global crisis of forest loss.

However, the final version of the EU's deforestation regulation, previously heralded as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"The regulation was gutted," said Hugo Schally, citing the removal of key obligations for later-stage companies to check the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Green party MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – including one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of more than a million EU citizens who supported an initiative in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation proposed to fight forest loss."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. The proposal encountered significant delays, ostensibly over technical problems, which sparked criticism.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation mandated that firms to trace commodities to their specific geographic origin using GPS coordinates, holding them accountable for forest loss along their supply lines with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in the EU capital from large companies, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from big trading partners outside the EU," said expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," lamented Schally. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into preparing," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

An EU representative supported the final law, stating: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient implementation."

"The new text ensures stability, which is crucial for companies and national regulators to successfully implement this vitally important regulation."