Originally hailed as a groundbreaking regulation that would curb the worldwide crisis of deforestation.
However, the final version of the EU's anti-deforestation law, once heralded as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, prompting criticism from its original architect and environmental politicians.
"The regulation was gutted," stated Hugo Schally, citing the exclusion of key obligations for later-stage companies to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.
Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would hinder monitoring and legal action.
A Watered-Down Law
Green party MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.
This outcome is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.
At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the most ambitious law ever put forward to fight forest loss."
A Story of Dilution
The regulation's dilution has been interpreted as the EU walking back its green talk. The proposal encountered significant delays, ostensibly over technical problems, which sparked criticism.
"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.
Originally, the regulation required companies to trace goods to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with penalties and hefty fines.
"This was not red tape for its own sake," the former official said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."
Intense Lobbying
However, the strict due diligence provoked opposition in the EU capital from multinational corporations, producer countries, conservative political groups and EU logging states.
Analysts point to last year's EU elections as a turning point, creating a new political majority more skeptical of environmental rules.
"The other pressure has come 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
The passed law includes 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 opened for next spring.
- Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.
"Rather than strengthening rules for companies, it stripped them back," said Schally. "Moving obligations upstream, it reduced accountability."
Uncertainty for Companies
The delays and changes have also created annoyance for companies that prepared in advance.
"We feel very annoyed because we invested significant resources into complying," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."
The Commission's Stance
A commission spokesperson supported the final law, stating: "The commission has responded to feedback and taken action to ensure a pragmatic and balanced application."
"The revised regulation provides for predictability, which is key for business and national regulators to successfully implement this vitally important law."
