EU Deforestation Law Largely 'Dismantled' After High Hopes

Originally hailed as a groundbreaking law that would help stop the global crisis of forest loss.

But, the final version of the EU's anti-deforestation law, once touted as the flagship policy of the Green Deal, has been passed in a significantly diluted state, prompting criticism from its original architect and green lawmakers.

"The regulation was stripped," stated the law's original author, pointing to the exclusion of key obligations for later-stage companies to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, describing the delays, loopholes and exemptions – such as one for paper goods – as the "systematic weakening" 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 demanding a ban on goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "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 significant delays, ostensibly over IT issues, which sparked criticism.

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

Originally, the law required companies to track commodities back to their exact plot of land using geolocation data, making them liable 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, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

However, the strict due diligence triggered a backlash in the EU capital from large companies, exporting nations, conservative political groups and EU logging states.

Experts cite last year's European Parliament elections as a decisive moment, creating a new political majority more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," said Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

An EU representative supported the final law, stating: "We have listened to concerns and taken action to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is key for business and national regulators to effectively enforce this very important regulation."