European Union Deforestation Regulation Effectively 'Gutted' Despite High Hopes

Widely celebrated as a pioneering regulation that would curb the worldwide crisis of deforestation.

But, the revised version of the European Union's anti-deforestation law, previously heralded as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"The regulation was hollowed out," stated the law's original author, citing the removal of crucial requirements for later-stage companies to check the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Green party MEP a leading green politician went further, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the toughest legislation proposed to combat deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over technical problems, which drew condemnation.

"By reopening this file rather than fixing a technical issue, the commission opened Pandora’s box," commented Toussaint.

Originally, the law mandated that firms to trace goods to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," Schally explained. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in Brussels from large companies, exporting nations, conservative political groups and EU logging states.

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

"The other pressure has come from major export markets like the United States," noted corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," said Schally. "Moving obligations to producers, 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 put a lot of effort into complying," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "The commission has responded to feedback and acted to ensure a pragmatic and balanced implementation."

"The revised regulation provides for predictability, which is crucial for companies and national regulators to successfully implement this very important law."