European Union Deforestation Regulation Largely 'Gutted' Despite Initial Fanfare

Originally hailed as a pioneering law that would combat the worldwide scourge of forest loss.

However, the final version of the European Union's deforestation regulation, once touted as the flagship policy of the European Green Deal, has been passed in a severely weakened state, leading to alarm from its original architect and green lawmakers.

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

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Environmental MEP Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of more than a million European citizens who supported an initiative in 2020 calling for a ban on goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the most ambitious legislation ever put forward to combat forest loss."

A Story of Dilution

The law's unravelling is seen by critics as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," remarked the Green MEP.

Originally, the regulation required companies to trace commodities back to their specific geographic origin using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, rightwing parties and member states with forestry industries.

Analysts point to 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," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

The Weakened Final Text

The passed law features several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped them back," lamented the law's author. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

The delays and changes have also caused frustration for businesses that complied early.

"We feel very annoyed because we put a lot of effort into complying," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient application."

"The new text ensures stability, which is crucial for companies and competent authorities to effectively enforce this vitally important regulation."