🔗 Share this article

It was a landmark regulation that would help stop the global crisis 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.

"The regulation was hollowed out," said Hugo Schally, pointing to the exclusion of key obligations for downstream traders to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would complicate the task of authorities.

Political Dismantling

Green party MEP Marie Toussaint went further, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "systematic weakening" of the law.

This final text stands in stark contrast to the demands of over 1.2 million EU citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner called it "the toughest legislation proposed to fight deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the European Union retreating from its environmental promises. It faced two major postponements, reportedly 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 required companies to trace commodities to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, producer countries, conservative political groups 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 has come from major export markets outside the EU," said corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it rolled them back," lamented the law's author. "By shifting responsibilities upstream, it reduced accountability."

Business Frustration

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

"It is very frustrating because we invested significant resources into complying," 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 defended the outcome, saying: "We have listened to feedback and taken action to ensure a pragmatic and balanced application."

"The new text provides for predictability, which is key for business and competent authorities to successfully implement this vitally important regulation."