European Union Deforestation Regulation Effectively 'Watered Down' Despite High Hopes

Widely celebrated as a pioneering regulation that would combat the global scourge of deforestation.

But, the revised version of the European Union's anti-deforestation law, previously heralded as the crown jewel of the Green Deal, has emerged in a severely weakened state, leading to alarm from its original architect and green lawmakers.

"The regulation was hollowed out," stated Hugo Schally, pointing to the exclusion of crucial requirements for later-stage companies to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would complicate the task of authorities.

Political Dismantling

Environmental vice-president a leading green politician was more blunt, describing the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of over 1.2 million EU citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner Frans Timmermans called it "the most ambitious law ever put forward to combat deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. The proposal encountered two major postponements, reportedly over technical problems, which drew condemnation.

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

Originally, the law required companies to trace goods to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," Schally said. "These rules were the tool that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from multinational corporations, producer countries, conservative political groups and EU logging states.

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

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

The Weakened Final Text

In the final legislation features key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A option for more reductions was opened 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," said the law's author. "By shifting responsibilities to producers, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we put a lot of effort into preparing," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, saying: "The commission has responded to concerns and acted to ensure a pragmatic and balanced implementation."

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