EU Deforestation Regulation Effectively 'Watered Down' After Initial Fanfare

It was a landmark regulation that would help stop the worldwide scourge of forest loss.

However, the revised version of the European Union's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has emerged in a severely weakened state, prompting criticism from its initial author and green lawmakers.

"It has been hollowed out," stated Hugo Schally, pointing to the removal of crucial requirements for downstream traders to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – including one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of more than a million European citizens who signed a petition 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 most ambitious legislation proposed to combat forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. It faced significant delays, reportedly over IT issues, which drew condemnation.

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

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

"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."

Intense Lobbying

Yet, the rigorous checks provoked opposition in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

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

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

The Weakened Final Text

In the final legislation features several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," said the law's author. "By shifting responsibilities 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 preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

Official Defense

A commission spokesperson supported the final law, saying: "The commission has responded to feedback and acted to ensure a pragmatic and balanced implementation."

"The new text ensures stability, which is crucial for companies and national regulators to successfully implement this very important law."