EU Deforestation Regulation Largely 'Dismantled' After High Hopes

Originally hailed as a pioneering law that would help stop the global scourge of forest loss.

However, the final version of the European Union's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, prompting alarm from its original architect and environmental politicians.

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

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president a leading green politician was more blunt, labeling the delays, loopholes and exemptions – such as one for printed products – as the "systematic weakening" of the law.

This final text stands in stark contrast to the hopes of more than a million European citizens who signed a petition in 2020 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation ever put forward to fight deforestation."

From Ambition to Compromise

The law's unravelling has been interpreted as the EU walking back its green talk. It faced two major postponements, reportedly over technical problems, which sparked criticism.

"By reopening this file instead of solving a technical issue, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the regulation required companies to trace commodities to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks provoked opposition in the EU capital from large companies, exporting nations, rightwing parties and EU logging states.

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

"Additional intense pressure has come from major export markets like the United States," said corporate sustainability professor, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• 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 the strictest monitoring.

"Instead of tightening rules for companies, it stripped them back," said Schally. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into complying," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

An EU representative defended the outcome, saying: "We have listened to concerns and taken action to ensure a simple, fair and cost-efficient application."

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