US loggers and Latin America try to defang EU forestry law

The EU’s landmark anti-deforestation law could be a victim of the bloc’s new trade deals with the United States and the South American Mercosur bloc, with the EU Commission under concerted pressure to water it down further.

As part of the agreement between the EU and US president Donald Trump in July to resolve the threat of 30 percent tariffs on European exports, officials are now working on a way to “address the concerns of US producers and exporters regarding the EU Deforestation Regulation,” with the aim of “avoiding undue impact on US–EU trade.” 

The EU law is “coming apart at the seams” and “if the EU keeps stepping backwards, they’ll eventually get to where they need to be and quit tilting at windmills,” said the American Loggers Council (ALC) in a statement on Tuesday (2 September). 

The law was originally designed to require sellers of products such as beef, coffee, chocolate, palm oil, and wood to demonstrate that their goods were traceable to land that has not been deforested after 31 December 2020. 

A list of 194 countries’ designations was published by the European Commission in May, with 50 listed as ‘standard risk’ and 140 as ‘low risk’.

The compliance burden for each country depends on the risk designation, but only Belarus, North Korea, Myanmar, and Russia — all of them countries facing EU sanctions for other reasons — were listed as high risk.

And though the US has been classified as ‘low risk’ by the EU executive, US trade officials are lobbying for a new ‘negligible risk’ category that would exempt their companies from the due diligence requirements altogether. 

Meanwhile, the Mercosur agreement, which the EU Commission formally passed for ratification on Wednesday, includes a “rebalancing mechanism” that could allow its five members to challenge EU measures, such as the anti-deforestation regulation or carbon border tax, that could negatively impact Mercosur's trade interests. 

Laura Restrepo Alameda, Advocacy Coordinator at Climate Action Network Latin America, an NGO, warned on Wednesday that the deforestation law was “among the files most at risk.” 

Global Forest Watch reported record global forest loss in 2024 - nearly seven million hectares of tropical primary forest were lost last year, close to double the figure for 2023. Brazil accounted for over 40 percent of the total, part of this due to its cattle ranching and soybean industries. However, Brazil was given the ‘standard risk’ designation by the EU executive in May. 

Companies sourcing from low-risk countries must prove their products are deforestation-free but are not required to assess or actively manage deforestation risks.  

The commission was already under pressure to water down a law which was originally intended to enter into force in January 2025, but was delayed by one year by the EU institutions last November. 

A report for the commission has estimated that another one year delay would result in around 230,000 hectares of deforestation across the world. 

In the European Parliament, in May, right-wing and liberal MEPs called for the introduction of a new ‘insignificant risk’ category in the benchmarking system.

Similar to a ‘no risk’ proposal drawn up by EU lawmakers last year, but which was rejected by EU governments, it would allow producers in countries with minimal deforestation, or net forest gain, to avoid some checks on their products, such as submitting the coordinates of their plots.  

Such a system would be similar to the ‘negligible risk’ category which the US is requesting. 

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