Under a proposed new European Union deforestation law announced Wednesday, countless food items, as well as wooden furniture and chocolate, could be subject to tough new reporting regulations, compelling companies to prove that they have not felled forests in order to make them.

The EU deforestation law—which still needs ratification by the bloc’s 27 countries—would have a major impact on agricultural giants and commodity traders, by regulating six key items: soy, cocoa, coffee, palm oil, beef, and wood. It also covers some processed products, like leather and furniture. The regulations would require companies doing business in Europe to show that their products do not contain ingredients that have been cultivated on deforested land.

The EU Commission, the bloc’s executive body, estimates that by clear-cutting forests in order to grow crops, that small handful of commodities alone adds more than 31.9 million metric tons of carbon emissions to the Earth’s atmosphere each year—a significant contributor to greenhouse gases and climate change.

“It’s about our responsibility as one of the largest economies, who unfortunately drives deforestation and forest degradation in other regions,” the bloc’s environment commissioner Virginijus Sinkevicius told Bloomberg. He called the new rules “a very ambitious, ground-breaking proposal, which hasn’t been proposed anywhere in the world.”

Major work ahead

Removing deforestation from the EU’s product chain will be an enormous task: the EU’s own research estimates that the bloc’s €4 billion of annual imports of products with palm oil—it’s in Nutella and many hard ice creams, for example—involved felling about 67,661 hectares of forest (167,194 acres). Another 161,676.11 acres of trees have been cut in order to plant soybeans—a big factor in Brazil’s deforestation.

By including leather, the EU has also targeted an item often overlooked in the debate over deforestation. In Brazil’s Amazon region, for example, trees have been cleared to make way for cattle ranches, which supply Volkswagen, General Motors, and Ford with the luxury leather used in making car seats. If Europe’s new rules come into effort, automakers will need to prove the ranches they use are not on deforested land.

In fact, major automakers and footwear companies have been quietly monitoring the deforestation deep in their supply chains at least since 2017, according to Sourcemap, a global supply-chain tracing company in New York, whose clients include large-scale manufacturers in those sectors.

“It is the idea that companies are responsible for what happens in their extended supply chain,” Sourcemap founder and CEO Leonardo Bonanni told Fortune on Wednesday. “That is a complete change, where companies are responsible not only for their suppliers, but for the suppliers of their suppliers.”

Under a U.S. law passed in 2018, customs agents can seize imports suspected of being made with forced labor. Unlike that law, the new EU deforestation rules would require companies to report details of deforestation, but would not necessarily seize assets.

The EU’s plan comes two weeks after its officials trumpeted new deforestation efforts at the COP26 climate talks in Glasgow, Scotland. European Commission president Ursula von der Leyen announced that the bloc would spend €1 billion on restoring and managing the world’s forests, which she called “the green lungs of the earth.” About €250 million of that money will go to Africa’s Congo Basin region, the world’s second biggest tropical rainforest area after the Amazon, where there has been rampant deforestation for new rubber plantations.

‘Major loopholes’

However, environmentalists say there are big holes in the EU’s deforestation plan, which they believe was designed in order to appease major  industries.

Perhaps the most notable absence on the list of regulated commodities is rubber—used to make tires for Europe’s giant auto industry. About 300 million tires were manufactured in Europe in 2020, and three of the world’s biggest tire makers—Pirelli, Continental, and Michelin—are European companies.

“Rubber is not part of the EU law, and we see that as one of the major loopholes in this legislation,” Greenpeace agricultural and forest campaign Sini Erajaa told Fortune. “There were definitely some political debates about it. The list of commodities is very limited.”

Scientists and environmentalists say millions of acres have been felled for rubber plantations in Southeast Asia—an industry that has boomed this century.

“Rapid expansion in rubber production since 2000 has had a devastating impact on millions of hectares of forests, ecosystems, habitats and biodiversity, as well as the human rights and livelihoods of hundreds of local and Indigenous communities,” the environmental group Mighty Earth said in a report last month. The group says the expansion of rubber plantations has provoked widespread evictions and human rights abuses in Cambodia, Indonesia, and elsewhere.

Also last month, three Swedish scientists concluded that the EU had excluded from the law two highly polluting commodities—rubber and maize—because of its flawed use of data. If the EU law goes through in its current form—without rubber or maize included—it “could undermine its effort to curb deforestation caused by EU imports,” they wrote.

Erajaa says the law has other problems, including not including pork or poultry, both of which consume vast amounts of animal feed grown on deforested land. And it fails to tackle the steady destruction of wetlands and grasslands across the world—essential to keeping global warming in check.

Under the new law, she says, agricultural companies could in theory choose to relocate their crops from deforested land to other areas that still lead to equally severe environmental damage and carbon emissions. “The law does a good job of protecting forests, but soy production is expanding in other natural valuable areas,” she said, citing wetlands in Southeast Asia, which have been drained as millions of acres of new wood plantations are planted, and the grasslands in Brazil, where soy crops have massively expanded.

“We are unfortunately surrounded by products that are connected to deforestation,” Erajaa said, “as well as in our fridge.”

More must-read business news and analysis from Fortune:

• Tesla CEO Elon Musk asked for a plan to save 42 million people from hunger. The UN gave him one
• 4 exemptions in the OSHA vaccine mandate that employers need to know
• 2 big unknowns loom large over the 2022 housing market
• How to convince your boss to let you keep working from home
• IBM debuts quantum machine it says no standard computer can match