EU Anti-Deforestation Regulation Largely 'Watered Down' Despite High Hopes

Widely celebrated as a landmark piece of legislation that would curb the worldwide scourge of forest loss.

However, the revised version of the European Union's deforestation regulation, previously heralded as the flagship policy of the European Green Deal, has been passed in a severely weakened state, prompting alarm from its initial author and green lawmakers.

"The regulation was gutted," said Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" 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 most ambitious legislation proposed to fight deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its green talk. It faced two major postponements, ostensibly over technical problems, which sparked criticism.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," commented Toussaint.

Originally, the regulation required companies to track commodities back to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

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

Mounting Pressure

Yet, the rigorous checks provoked opposition in the EU capital from multinational corporations, exporting nations, rightwing parties and EU logging states.

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority less favorable toward environmental rules.

"Additional intense pressure came from big trading partners like the United States," noted corporate sustainability professor, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category 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 the strictest monitoring.

"Instead of tightening rules for companies, it rolled them back," said Schally. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we invested significant resources into complying," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. 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 pragmatic and balanced implementation."

"The revised regulation ensures stability, which is crucial for companies and national regulators to effectively enforce this very important law."