European Union Deforestation Regulation Effectively 'Watered Down' After High Hopes

Originally hailed as a landmark law that would combat the global scourge of deforestation.

But, the revised version of the EU's deforestation regulation, previously heralded as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"It has been hollowed out," stated Hugo Schally, pointing to the removal of key obligations for downstream traders to check the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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 vice-president a leading green politician was more blunt, describing the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the demands of more than a million EU citizens who signed a petition in 2020 demanding a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the toughest law ever put forward to fight deforestation."

A Story of Dilution

The law's unravelling is seen by critics as the European Union retreating from its green talk. It faced significant delays, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the regulation required companies to trace goods back 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 said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

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.

Experts cite last year's EU elections as a turning point, creating a new political majority more skeptical of green regulations.

"The other pressure has come from big trading partners like the United States," noted expert Andreas Rasche, implying the commission gave in to some requests during negotiations.

The Weakened Final Text

The passed law includes key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," said Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"It is very frustrating because we invested significant resources into complying," 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 big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced implementation."

"The new text ensures stability, which is crucial for companies and competent authorities to successfully implement this very important regulation."