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It was a landmark law that would curb the worldwide crisis of forest loss.

But, the final version of the European Union's deforestation regulation, previously heralded as the flagship policy of the Green Deal, has been passed in a severely weakened state, leading to criticism from its original architect and environmental politicians.

"The regulation was gutted," stated Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party MEP Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of more than a million EU citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans called it "the toughest legislation proposed to combat forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its green talk. The proposal encountered two major postponements, reportedly over IT issues, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation mandated that firms to trace goods back to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with penalties and hefty fines.

"This was not red tape for its own sake," the former official said. "It was the mechanism that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from large companies, producer countries, conservative political groups and member states with forestry industries.

Experts cite last year's European Parliament elections as a turning point, shifting the balance of power more skeptical of environmental rules.

"The other pressure came from big trading partners like the United States," said corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

The Weakened Final Text

The passed law includes key dilutions:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," said Schally. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"We feel very annoyed because we put a lot of effort into preparing," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced implementation."

"The revised regulation provides for predictability, which is key for business and national regulators to successfully implement this very important law."