🔗 Share this article

It was a landmark regulation that would combat the worldwide scourge of forest loss.

However, the final version of the EU's deforestation regulation, once heralded as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, leading to criticism from its initial author and green lawmakers.

"It has been gutted," stated Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to check the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Green party vice-president Marie Toussaint went further, labeling the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the demands of more than a million European citizens who supported an initiative in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest legislation proposed to fight forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its environmental promises. It faced two major postponements, reportedly over IT issues, which sparked criticism.

"By revisiting the legislation rather than fixing a simple IT problem, the commission opened Pandora’s box," commented Toussaint.

Originally, the law required companies to trace goods to their specific geographic origin using GPS coordinates, making them liable for forest loss along their supply lines with penalties and hefty fines.

"This was not red tape for its own sake," Schally explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

Yet, the rigorous checks provoked opposition in Brussels from multinational corporations, exporting nations, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, creating a new political majority more skeptical of environmental rules.

"The other pressure came from major export markets outside the EU," said expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," lamented the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into complying," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

Official Defense

A commission spokesperson supported the final law, saying: "The commission has responded to concerns and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation provides for predictability, which is key for business and competent authorities to effectively enforce this very important law."