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Originally hailed as a pioneering regulation that would help stop the worldwide crisis of forest loss.

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

"The regulation was gutted," said Hugo Schally, pointing to the exclusion of key obligations for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Environmental MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

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

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest legislation proposed to combat deforestation."

A Story of Dilution

The law's unravelling is seen by critics as the EU walking back its green talk. The proposal encountered significant delays, ostensibly over technical problems, which sparked criticism.

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

In its first draft, the regulation required companies to track goods to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks provoked opposition in Brussels from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, creating a new political majority more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," said corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

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

Uncertainty for Companies

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into preparing," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... 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 simple, fair and cost-efficient application."

"The new text provides for predictability, which is key for business and competent authorities to successfully implement this very important regulation."