EU guts deforestation law, but US exporters get no break

BRUSSELS (CN) — The European Union said Tuesday it will dramatically scale back its controversial deforestation law, exempting close to 100% of producers and thousands of manufacturers from key compliance requirements in what officials privately acknowledge is a strategy to repackage Brussels’ own simplification agenda as concessions to the Trump administration.

The move represents an abrupt reversal: Just last month, Brussels proposed pushing back the law for another full year, citing IT system problems. Now officials say the system can handle a Dec. 30 launch — but only because the changes slash the number of companies required to file compliance documents.

“We are confident that this does not change our capacity to fight against deforestation,” a senior EU official told reporters Tuesday. The official said due diligence obligations on importers bringing products into the EU “do not change at all.”

Jessika Roswall, the EU’s commissioner for environment, echoed that message in a statement: “It is not about lowering the ambition, it’s about making the rules work in a better and smarter way because effective implementation matters.”

That’s the catch for American companies: Large U.S. exporters shipping beef, soybeans, coffee, cocoa, palm oil, rubber and timber will still need to submit full due diligence statements, including geolocation data proving the products weren’t produced on land deforested after December 2020.

In other words, Brussels gets to claimit responded to U.S. President Donald Trump’s demands while keeping the trade barriers that matter most to American businesses largely intact.

Mass exemptions, but not for U.S.

The timing is no coincidence: The deforestation regulation is among several EU policies explicitly mentioned in trade negotiations between Trump and European Commission President Ursula von der Leyen, with Washington viewing such rules as trade barriers that unfairly block American exports.

Behind closed doors, EU officials have described their strategy as repackaging their own regulatory rollbacks to look like concessions that satisfy Trump’s trade demands, even while publicly maintaining the changes are independent policy decisions.

The pattern extends beyond U.S. negotiations. Brussels also delayed the regulation in September after Indonesia — whose palm oil industry faced similar compliance burdens — secured a sweeping trade deal. Like Trump, Indonesian officials explicitly demanded regulatory relief, and like Trump, they got it.

Under the proposal, Brussels will eliminate the requirement for downstream manufacturers — companies that process or transform imported commodities — to file their own due diligence statements, known as DDS. Instead, these firms will simply retain and pass along the compliance documents from their suppliers. A senior EU official said this change alone will exempt roughly 9,000 companies — mostly European manufacturers — from creating new filings.

The proposal also exempts micro- and small primary producers in low-risk countries — defined as businesses with fewer than 50 employees and less than 8 million euros (roughly $8.7 million) in annual revenue — from filing statements entirely. These producers, who account for close to 100% of farm and forestry operations in the EU, will instead complete a simplified one-time registration.

Small U.S. producers technically qualify for simplified registration since the U.S. is classified as “low-risk,” but most don’t export directly to Europe anyway, selling instead to larger American trading companies that must comply with full requirements.

The one area where American companies benefit: U.S. firms with manufacturing operations inside the EU will no longer need to create their own compliance filings.

‘Shameful surrender’

The proposal is part of Brussels’ broader push to reduce regulatory burdens across its Green Deal legislation, as Europe’s political focus shifts toward economic growth and competitiveness. Other major environmental reporting requirements have also been delayed or scaled back in recent months.

The deforestation regulation, which entered into force in June 2023, was designed to ensure that products sold in the EU don’t contribute to global forest loss — a major driver of climate change. The United Nations estimates that over 1 billion acres of forest were lost to deforestation between 1990 and 2020.

Brussels has repeatedly insisted it won’t unwind existing laws to suit Trump’s agenda. But by framing its own simplification efforts as responses to U.S. concerns, EU leaders hope to show progress on the trade deal while preserving what they consider core regulatory sovereignty.

Within minutes of the announcement, environmental groups condemned the proposal. The World Wildlife Fund called it “a shameful surrender to political pressure,” while ClientEarth warned that “introducing legal exceptions at the eleventh hour risks creating loopholes.”

Michael Rice, a ClientEarth lawyer, said the changes “effectively grant immunity to the laggards who have failed to prepare while penalizing businesses that have invested in good faith to become compliant.” Both groups noted the timing just weeks before the COP30 climate summit undermines EU credibility as a climate leader.

The criticism underscores the political tightrope Brussels is walking: Environmental advocates see the changes as a betrayal of the 1.1 million European citizens who demanded action on deforestation, while trading partners and industry groups have spent months lobbying for exactly these kinds of simplifications.

Brussels maintains that traceability remains intact because importers bringing goods into the EU market still bear full responsibility for proving products are deforestation-free.

The EU is racing to finalize the changes before year-end. The proposal now goes to lawmakers, who must approve it before the Dec. 30 deadline — requiring a fast-track vote similar to last year’s successful delay approval. Brussels said it’s working on contingency plans to ensure companies can comply if the proposal isn’t adopted by then, though officials didn’t elaborate on what those plans would entail.

For American agricultural and forestry companies that have invested in compliance systems over the past year, the message is clear: Brussels is willing to ease burdens on its own companies and cave to trade pressure from partners like Indonesia — but when it comes to actually opening markets to American beef, soy and timber, the barriers remain firmly in place.

Courthouse News correspondent Yuval Molina is based in Brussels, Belgium.