ZDH criticizes revised deforestation ordinance once again

The EU Commission has amended the deforestation regulation. The trades sector had expected more. The revised regulation is insufficient and falls far short of what would have been necessary.

Following criticism of the regulation on deforestation-free supply chains from various quarters, including the skilled trades sector, the the European Commission The implementation of the regulation was postponed, improvements were made, and then it was postponed again to allow for further corrections. The aim of the deforestation regulation is to ensure that products of domestic and international relevance containing raw materials such as wood, cocoa, beef, coffee, and soy do not contribute to deforestation.

The Central Association of German Crafts The German Confederation of Skilled Crafts (ZDH) had repeatedly called for relief for its member companies and warned against excessive reporting requirements and legal uncertainties. The Commission has now proposed further simplifications for "a smooth and effective implementation" of the already revised regulation. "These measures will provide additional clarity for economic operators, Member States, third countries and other stakeholders, while ensuring legal stability and predictability," the Commission stated.

Compliance costs are expected to decrease significantly.

The measures include an updated guide and frequently asked questions, as well as a draft delegated act on the product scope of the regulation. The Commission also intends to present Member States with an updated implementing act on the information system. All measures are expected to lead to a "significant reduction in the administrative burden." The Commission speaks of a reduction in the annual compliance costs for companies of around 75 percent.

Furthermore, databases of producer country legislation and raw material certification schemes are intended to simplify risk assessment and due diligence, thereby facilitating trade. In the new guidance document, the Commission clarifies supply chain obligations and the specific rules for micro and small enterprises. The draft delegated act includes amendments to the scope of the Product Directive. It updates last year's draft delegated act and takes into account stakeholder feedback received during the consultation phase.

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Updated information system

At the same time, the Commission has updated the information system to improve its user-friendliness. The updated draft implementing act on the information system will be submitted to the Member States before its adoption. Among the changes is a simplified registration form for micro and small businesses, which will be aligned with the existing due diligence declaration format. The deforestation regulation is expected to enter into force at the end of this year.

"The amendment to the deforestation regulation is insufficient and falls far short of what would have been necessary. Contrary to repeated demands from the skilled trades sector, the EU Commission has not presented any further amending legislation," explains Holger Schwannecke, Secretary General of the German Confederation of Skilled Crafts (ZDH). The approach of resolving legal inconsistencies through guidance documents and subordinate legislation misses the mark and leaves important problems unresolved. The initial revision was a step in the right direction, but it absolutely had to be followed up with a further amendment initiative. 

New uncertainties instead of practical guidelines

"The fact that this hasn't happened is a serious matter," the Secretary General emphasizes. "As a result, regulations remain in place that impose considerable burdens on downstream market participants and effectively enforce comprehensive tracking of non-compliant products along the entire value chain." The EU Commission is thus achieving the exact opposite of what it intended. Schwannecke: "Instead of clear and manageable guidelines, new uncertainties, additional bureaucracy, and significant liability risks are being created."

Businesses would be forced into a role they neither can nor should fulfill, with noticeable consequences for processes, costs, and competitiveness. These structural deficiencies cannot be remedied by non-binding guidance. What was needed was a formal amendment law with clear legal corrections. "The Commission had the opportunity to effectively reduce bureaucracy here without jeopardizing the achievement of the objectives. This opportunity was missed, and the existing problems are being exacerbated."

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