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Originally hailed as a pioneering law that would curb the worldwide scourge of forest loss.

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

"The regulation was gutted," said the law's original author, citing the exclusion of key obligations for later-stage companies to verify the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Green party MEP a leading green politician was more blunt, 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 demands of more than a million EU citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

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 regulation's dilution is seen by critics as the European Union retreating from its environmental promises. The proposal encountered two major postponements, reportedly over technical problems, which sparked criticism.

"By revisiting the legislation instead of solving a technical issue, authorities invited political interference," commented the Green MEP.

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

"It wasn't bureaucracy for its own sake," the former official said. "These rules were the tool that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority less favorable toward environmental rules.

"The other pressure has come from big trading partners outside the EU," noted corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

The Weakened Final Text

In the final legislation includes several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening downstream obligations, 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 created annoyance for companies that prepared in advance.

"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 could be altered again. It’s a big frustration."

Official Defense

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

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