EU Anti-Deforestation Regulation Largely 'Watered Down' Despite Initial Fanfare

Widely celebrated as a pioneering piece of legislation that would help stop the global scourge of forest loss.

However, the final version of the European Union's deforestation regulation, once touted as the crown jewel of the Green Deal, has emerged in a significantly diluted state, prompting criticism from its initial author and green lawmakers.

"It has been stripped," said Hugo Schally, citing the exclusion of key obligations for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Green party vice-president Marie Toussaint was more blunt, describing the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This outcome is a far cry from the demands of more than a million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the most ambitious legislation proposed to combat forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its green talk. The proposal encountered significant delays, ostensibly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a technical issue, the commission opened Pandora’s box," commented the Green MEP.

Originally, the law mandated that firms to trace goods back to their specific geographic origin using GPS coordinates, holding them accountable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy 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

Yet, the strict due diligence triggered a backlash in the EU capital from large companies, producer countries, rightwing parties and EU logging states.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

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

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," lamented Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into complying," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

An EU representative supported the final law, saying: "The commission has responded to concerns and acted to ensure a pragmatic and balanced implementation."

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