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It was a groundbreaking regulation that would curb the worldwide crisis of forest loss.

But, the final version of the EU's deforestation regulation, previously touted as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, prompting alarm from its original architect and green lawmakers.

"It has been gutted," said Hugo Schally, citing the removal of crucial requirements for later-stage companies to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, fewer data points, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Green party vice-president a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands 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, the EU's climate chief the European commissioner trumpeted it as "the toughest law ever put forward to combat forest loss."

From Ambition to Compromise

The law's unravelling has been interpreted as the European Union retreating from its green talk. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, the commission opened Pandora’s box," commented Toussaint.

In its first draft, the law mandated that firms to trace goods back to their specific geographic origin using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence provoked opposition in the EU capital from multinational corporations, producer countries, rightwing parties 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 green regulations.

"The other pressure came from big trading partners like the United States," noted expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," lamented Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into preparing," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative defended the outcome, saying: "We have listened to concerns and taken action to ensure a pragmatic and balanced implementation."

"The revised regulation ensures stability, which is key for business and competent authorities to effectively enforce this very important law."