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Widely celebrated as a pioneering law that would curb the worldwide scourge of forest loss.

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

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

He warned that fewer obligated actors, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party MEP Marie Toussaint 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 more than a million EU citizens who signed a petition in 2020 demanding a ban on goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest law proposed to combat deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its green talk. It faced significant delays, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the regulation required companies to trace commodities back 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.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

Yet, the strict due diligence provoked opposition in the EU capital from large companies, producer countries, rightwing parties and member states with forestry industries.

Experts cite last year's EU elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from big trading partners outside the EU," noted expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

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

"Rather than strengthening downstream obligations, it rolled them back," lamented Schally. "Moving obligations to producers, it reduced accountability."

Business Frustration

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," said a coffee company executive. "We invested in software, followed seminars and built a team... 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 implementation."

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