EU Deforestation Law Effectively 'Gutted' After High Hopes

It was a pioneering 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 heralded as the flagship policy of the Green Deal, has been passed in a severely weakened state, leading to criticism from its initial author and environmental politicians.

"The regulation was stripped," stated the law's original author, pointing to the removal of key obligations for downstream traders to verify the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands of more than a million European citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest law ever put forward to combat forest loss."

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 IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," commented the Green MEP.

Originally, the law mandated that firms to trace commodities back to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with penalties and hefty fines.

"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, conservative political groups and member states with forestry industries.

Experts cite last year's EU elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"The other pressure came from major export markets outside the EU," said corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," lamented Schally. "Moving obligations upstream, it reduced accountability."

Business Frustration

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into preparing," 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

A commission spokesperson defended the outcome, saying: "The commission has responded 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 effectively enforce this very important regulation."