🔗 Share this article

It was a pioneering regulation that would curb the worldwide scourge of deforestation.

But, the final version of the EU's deforestation regulation, previously heralded as the crown jewel of the European Green Deal, has emerged in a severely weakened state, prompting alarm from its initial author and environmental politicians.

"The regulation was stripped," said Hugo Schally, citing the exclusion of crucial requirements for later-stage companies to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental MEP Marie Toussaint went further, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of over 1.2 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 toughest legislation ever put forward to combat deforestation."

From Ambition to Compromise

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

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the law required companies to trace commodities to their specific geographic origin using GPS coordinates, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels from multinational corporations, producer countries, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, shifting the balance of power more skeptical of green regulations.

"The other pressure came from big trading partners like the United States," said corporate sustainability professor, implying the commission gave in to some demands in trade talks.

The Weakened Final Text

In the final legislation features key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators 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.

"Rather than strengthening downstream obligations, it rolled them back," lamented Schally. "Moving obligations upstream, it reduced accountability."

Business Frustration

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort into preparing," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, saying: "The commission has responded to concerns and acted to ensure a simple, fair and cost-efficient application."

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