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Widely celebrated as a groundbreaking law that would help stop the worldwide crisis of deforestation.

However, the revised version of the EU's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has emerged in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"It has been gutted," said the law's original author, pointing to the exclusion of key obligations for later-stage companies to check the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned 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

Green party vice-president Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the hopes of over 1.2 million EU citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest legislation ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. The proposal encountered significant delays, ostensibly over technical problems, which drew condemnation.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation mandated that firms to track commodities to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with penalties and hefty fines.

"This was not red tape for its own sake," Schally said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from large companies, producer countries, conservative political groups and member states with forestry industries.

Experts cite last year's EU elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"The other pressure came from big trading partners outside the EU," said corporate sustainability professor, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law features key dilutions:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new “low risk” category was created.
• 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 downstream obligations, it stripped them back," said Schally. "By shifting responsibilities to producers, it reduced accountability."

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

"We feel very annoyed because we put a lot of effort into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

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

"The new text ensures stability, which is key for business and national regulators to effectively enforce this very important regulation."