🔗 Share this article

It was a groundbreaking piece of legislation that would help stop the global 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 significantly diluted state, leading to criticism from its initial author and environmental politicians.

"It has been hollowed out," stated the law's original author, pointing to the removal of key obligations for downstream traders to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Environmental MEP a leading green politician went further, labeling the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This final text stands in stark contrast to the demands of over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "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. The proposal encountered significant delays, ostensibly over IT issues, which sparked criticism.

"By reopening this file instead of solving a technical issue, authorities invited political interference," commented Toussaint.

Originally, the regulation mandated that firms to trace commodities back to their specific geographic origin using GPS coordinates, making them liable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

However, the rigorous checks provoked opposition in Brussels from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

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

"The other pressure has come from major export markets outside the EU," said expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened 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 the law's author. "By shifting responsibilities upstream, it reduced accountability."

Business Frustration

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into complying," stated 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 big frustration."

Official Defense

An EU representative supported the final law, saying: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

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