🔗 Share this article

Originally hailed as a groundbreaking law that would curb the worldwide crisis of forest loss.

But, the final version of the European Union's deforestation regulation, previously touted as the flagship policy of the Green Deal, has been passed in a severely weakened state, leading to alarm from its initial author and green lawmakers.

"It has been hollowed out," said Hugo Schally, citing the exclusion of key obligations for later-stage companies to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned 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, describing the postponements, exceptions and new loopholes – including one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million European citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the toughest legislation ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. The proposal encountered significant delays, reportedly over IT issues, which sparked criticism.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation mandated that firms to trace goods back to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the strict due diligence provoked opposition in Brussels from large companies, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"Additional intense pressure has come from major export markets outside the EU," said expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new “low risk” category was created.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

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

Business Frustration

The delays and changes have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

An EU representative supported the final law, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced implementation."

"The revised regulation ensures stability, which is crucial for companies and competent authorities to successfully implement this vitally important law."