🔗 Share this article

Widely celebrated as a groundbreaking piece of legislation that would curb the global scourge of forest loss.

But, the revised version of the EU's deforestation regulation, once touted as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, prompting alarm from its original architect and environmental politicians.

"It has been gutted," stated Hugo Schally, citing the removal of key obligations for downstream traders to verify the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Green party MEP a leading green politician went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million EU citizens who signed a petition in 2020 demanding a ban on goods linked to forest destruction.

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

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its environmental promises. The proposal encountered two major postponements, ostensibly over technical problems, which drew condemnation.

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

Originally, the regulation required companies to track goods back to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with criminal charges and large financial penalties.

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

Mounting Pressure

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

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority more skeptical of green regulations.

"Additional intense pressure came from major export markets like the United States," said corporate sustainability professor, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• Retailers and traders 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 a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it rolled them back," lamented the law's author. "Moving obligations 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 Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative supported the final law, stating: "The commission has responded to feedback and taken action to ensure a pragmatic and balanced application."

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