EU Deforestation Regulation Effectively 'Gutted' After Initial Fanfare

Widely celebrated as a pioneering piece of legislation that would help stop the global crisis of deforestation.

However, the revised version of the European Union's deforestation regulation, once touted as the flagship policy of the Green Deal, has emerged in a significantly diluted state, prompting alarm from its original architect and green lawmakers.

"The regulation was gutted," stated Hugo Schally, citing the exclusion of key obligations for later-stage companies to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Environmental MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – including one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands of over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest legislation proposed to combat deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its environmental promises. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," commented Toussaint.

Originally, the regulation mandated that firms to track goods to their exact plot of land 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. "These rules were the tool that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence provoked opposition in the EU capital from multinational corporations, exporting nations, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a decisive moment, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from major export markets outside the EU," said corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation features key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

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

Uncertainty for Companies

The delays and changes have also caused frustration 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, saying: "The commission has responded to concerns and acted to ensure a pragmatic and balanced application."

"The revised regulation ensures stability, which is crucial for companies and competent authorities to effectively enforce this very important law."