🔗 Share this article

Originally hailed as a pioneering regulation that would help stop the worldwide scourge of deforestation.

However, the revised version of the EU's deforestation regulation, previously heralded as the crown jewel of the Green Deal, has been passed in a significantly diluted state, prompting criticism from its original architect and environmental politicians.

"The regulation was stripped," said Hugo Schally, citing the removal of key obligations for later-stage companies to check the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Environmental vice-president a leading green politician was more blunt, labeling the delays, loopholes and exemptions – including one for printed products – as the "systematic weakening" of the law.

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

When launched in 2021, the EU's climate chief the European commissioner trumpeted it as "the toughest law proposed to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its green talk. 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," remarked the Green MEP.

In its first draft, the regulation required companies to track goods back to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," the former official explained. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the strict due diligence provoked opposition in the EU capital from large companies, producer countries, conservative political groups and member states with forestry industries.

Experts cite last year's European Parliament elections as a turning point, creating a new political majority less favorable toward environmental rules.

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

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it rolled them back," lamented Schally. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

An EU representative defended the outcome, stating: "The commission has responded to feedback and acted to ensure a pragmatic and balanced application."

"The new text provides for predictability, which is crucial for companies and competent authorities to effectively enforce this very important regulation."