The EU has a new deforestation law: here’s what it means

In a major development, the European Commission has proposed a new law to halt deforestation and minimise the EU’s impact on forests worldwide.

The proposed law will require companies that sell commodities linked to deforestation and forest degradation – such as soy, palm oil and beef products – to ensure they are ‘deforestation-free’ before placing them on the European market or exporting them from the EU.

This proposal is a key part of the EU’s Green Deal plans to protect ecosystems and biodiversity. At the COP26 climate summit in Glasgow, the EU joined more than 140 world leaders to commit to ending deforestation by 2030. Regulating the use of products that drive deforestation is a key part of achieving this.

The proposed law has also been of keen interest to the European public, with a record-breaking one million EU citizens signing a petition in 2020 calling for a strong EU law to protect the world’s forests and other ecosystems and the rights of forest defenders.

The proposal will now be reviewed by the European Parliament and the Council of the European Union as part of the bloc’s law-making process, before being finalised.

While the Commission’s proposal is a big step forward, there are several limitations that risk its effectiveness. Here, ClientEarth lawyers lay out its strengths and weaknesses and the improvements needed before the proposal becomes law.

Notable strengths

The Commission’s proposal shows that there is political will to address the EU’s deforestation impact at home and abroad.

This is crucial for ensuring the EU’s footprint on nature aligns with its climate and biodiversity commitments and acknowledges that fixing industrial agriculture is a key piece of the puzzle.

One strength of the law is how it requires due diligence from EU companies to make sure certain products in their supply chains are not linked to deforestation at home or abroad.

ClientEarth Forest-risk Commodities Lawyer Michael Rice said:

“For years, forest-risk industries have found ways to avoid tracing their products back to the plantation or farm where they come from, which has helped them avoid accountability for the significant impacts associated with the establishment of those plantations and farms.

“This proposal is a crucial break from ‘business as usual’ in this regard.”

The proposed law also improves on existing EU provisions tackling illegal timber in the EU Timber Regulation regarding complaints, penalties and compliance checks.

However, the impact of these improvements will ultimately depend on the capacity and willingness of member states to enforce the new rules. When enforcement is left solely to member states, results can vary wildly.

“This lack of consistency is harmful for forests and the market, and creates loopholes that disadvantage businesses who are genuinely trying to do the right thing,” Michael said.

“Instead of relying only on national enforcement agencies, forest defenders, local communities and civil society should be able to hold companies to account in European courts. They are often the most effective watchdogs, and this would give the law real teeth.”

Worrying shortcomings

The inclusion of a supply chain due diligence requirement is positive, but it is limited to companies trading in forest-risk commodities. This excludes financial institutions like banks that do business with forest-risk industries and might be linked to deforestation abroad.

The proposal also fails to directly address human rights issues like violence against forest defenders and access to justice for victims of land-grabbing.

“This means companies can continue to avoid accountability for harm to Indigenous Peoples and local communities linked to their supply chains,” Michael said.

Furthermore, the proposal focuses solely on forests and does not include other biodiversity and climate-critical ecosystems that are under similar pressure from agricultural expansion – like wetlands, peatlands and grasslands.

Impact on forest communities: Gabon

While the proposed law regulates certain products entering and leaving the EU market, its existence will have profound impacts on forest communities and Indigenous Peoples whose livelihoods depend on the preservation of forest ecosystems.

Jenny Madouta, Deputy Head of the Forest Governance Department at Brainforest Gabon, said:

“Reducing the demand for certain forest-risk products is important to reduce pressure on forests and the communities whose livelihoods depend on their preservation. In Gabon, many communities rely on forest and agricultural products for their own use and their income, and those local communities are best placed to manage forests sustainably and prevent deforestation.

“Just like Gabon, many countries today are putting in place mechanisms that could mitigate deforestation, such as the due diligence system and the ongoing implementation of a national traceability and legality verification system. Strengthening these methods is just as important to avoid further deforestation as reducing global demand for deforestation-linked products.

The Commission’s proposal includes the potential for the EU to work with producer countries to address local drivers of deforestation. It will be essential that the Commission prioritises the rights, perspectives and participation of Indigenous Peoples, forest defenders and local communities when developing plans for engagement.

Need for stakeholder participation: Ghana

Clement Kojo Akapame, Founding Partner of TaylorCrabbe and ClientEarth In-Country Associate in Ghana, has also welcomed the proposal, stating:

“We are pleased that the regulation does not detract from years of work in other areas such as the Voluntary Partnership Agreements (VPAs), as it includes a provision declaring wood covered by a FLEGT license to have fulfilled the legality requirement.”

The VPA framework has supported many forest-rich countries to engage in transparent and inclusive law reform processes to increase protections for forests.

“The regulation should also be accompanied with financial and technical support to effectively address tenure rights and land use challenges, and improve legislative frameworks and law enforcement to protect forests, human rights and other ecosystems in producer countries.”

What comes next?

The European Parliament and the Council can now build on the Commission’s proposal – to increase its ambition and live up to the commitments the EU set in Glasgow for ending deforestation.

“The public has high expectations for this new law and the public must be able to monitor compliance and pursue enforcement when necessary,” Michael said.

“Otherwise the promise of a law that ‘ends deforestation’ risks ringing hollow.”

Read ClientEarth's in-depth analysis of the EU law on deforestation free products here, and how it compares with the EU Timber Regulation here.