🔗 Share this article

It was a pioneering law that would curb the global crisis of deforestation.

However, the revised version of the European Union's deforestation regulation, previously heralded as the crown jewel of the Green Deal, has been passed in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"It has been hollowed out," said Hugo Schally, citing the removal of key obligations for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental vice-president Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the demands of more than a million European citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest law proposed to combat deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its green talk. It faced significant delays, reportedly over IT issues, which sparked criticism.

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

Originally, the regulation mandated that firms to trace goods to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally said. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence provoked opposition in the EU capital from large companies, exporting nations, conservative political groups 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 environmental rules.

"The other pressure came from big trading partners outside the EU," noted expert Andreas Rasche, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

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

"Rather than strengthening rules for companies, it stripped them back," said the law's author. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," 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 simple, fair and cost-efficient implementation."

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