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Originally hailed as a groundbreaking piece of legislation that would help stop the global crisis of deforestation.

However, the final version of the EU's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its initial author and environmental politicians.

"It has been gutted," stated Hugo Schally, citing the removal of key obligations for downstream traders to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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 demands of over 1.2 million European citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the most ambitious law proposed to fight deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its green talk. The proposal encountered two major postponements, reportedly over technical problems, which sparked criticism.

"By revisiting the legislation rather than fixing a technical issue, authorities invited political interference," commented Toussaint.

In its first draft, the regulation mandated that firms to trace goods back to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

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

Intense Lobbying

Yet, the strict due diligence provoked opposition in Brussels from large companies, exporting nations, conservative political groups and EU logging states.

Experts cite last year's EU elections as a turning point, creating a new political majority more skeptical of green regulations.

"The other pressure has come from big trading partners outside the EU," noted corporate sustainability professor, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation features 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 four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it rolled them back," said the law's author. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we put a lot of effort into complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, saying: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation provides for predictability, which is crucial for companies and national regulators to effectively enforce this very important law."