From 2021 onwards, forests and forestry will for the first time contribute to the European Union’s climate action targets. The new Land Use, Land Use Change & Forestry (lulucf) Regulation commits Member States to achieve carbon neutrality on the basis of an EU-wide system. The system accounts for carbon sequestered and emitted from forests and other land uses like crop- and wetland. What looks like a significant step in the Union’s climate policy framework, however, leaves the large potential of Europe’s forest sector for climate mitigation untapped. The present article draws this conclusion from a comprehensive analysis of 67 documents related to decision-making on the lulucf Regulation. It reveals coalitional politics and the salience of the Commission’s behavior as key to explain the Regulation’s limited scope and concludes with assessing the future role of forests in the Union’s climate policy framework.