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It was a pioneering piece of legislation that would combat the worldwide scourge of deforestation.

However, the final version of the European Union's deforestation regulation, once heralded as the flagship policy of the Green Deal, has emerged in a severely weakened state, prompting criticism from its initial author and green lawmakers.

"The regulation was gutted," said Hugo Schally, citing the removal of key obligations for downstream traders to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president a leading green politician was more blunt, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million European citizens who signed a petition in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest law ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its environmental promises. It faced two major postponements, ostensibly over IT issues, which sparked criticism.

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

In its first draft, the law required companies to track commodities back to their specific geographic origin using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "These rules were the tool that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, conservative political groups and EU logging states.

Experts cite last year's EU 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," noted expert Andreas Rasche, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced application."

"The revised regulation ensures stability, which is key for business and national regulators to successfully implement this vitally important law."