European Union Deforestation Law Effectively 'Watered Down' After Initial Fanfare

It was a landmark regulation that would combat the worldwide crisis of forest loss.

But, the revised version of the EU's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has emerged in a severely weakened state, prompting criticism from its initial author and environmental politicians.

"It has been hollowed out," stated Hugo Schally, citing the removal of key obligations for later-stage companies to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Green party vice-president a leading green politician went further, describing the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the hopes of more than a million EU citizens who signed a petition in 2020 demanding a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the toughest law proposed to combat deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its green talk. It faced significant delays, ostensibly over IT issues, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the regulation required companies to trace commodities to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks triggered a backlash in Brussels from multinational corporations, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"The other pressure came from major export markets like the United States," said expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" 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 rolled them back," lamented Schally. "Moving obligations to producers, it reduced accountability."

Business Frustration

The delays and changes have also created annoyance for companies that prepared in advance.

"It is very frustrating because we invested significant resources into preparing," stated Xavier Rombouts. "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

An EU representative defended the outcome, stating: "We have listened to feedback and taken action to ensure a pragmatic and balanced application."

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