🔗 Share this article

Originally hailed as a landmark regulation that would curb the global scourge of forest loss.

But, the revised version of the European Union's deforestation regulation, once heralded as the flagship policy of the Green Deal, has been passed in a significantly diluted state, leading to criticism from its original architect and environmental politicians.

"It has been gutted," said Hugo Schally, pointing to the removal of key obligations for later-stage companies to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Green party MEP Marie Toussaint went further, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the demands of over 1.2 million European citizens who signed a petition in 2020 demanding a prohibition of goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the most ambitious 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. The proposal encountered significant delays, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation required companies 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.

"This was not red tape for its own sake," Schally said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

Yet, the rigorous checks triggered a backlash in the EU capital from large companies, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority less favorable toward green regulations.

"The other pressure came from major export markets like the United States," noted corporate sustainability professor, implying the commission gave in to some requests during negotiations.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Downstream operators were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening rules for companies, it stripped them back," said the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into complying," said 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

An EU representative defended the outcome, saying: "The commission has responded to feedback and taken action to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is crucial for companies and national regulators to successfully implement this very important regulation."