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It was a pioneering regulation that would curb the worldwide scourge of deforestation.

However, the final version of the EU's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has emerged in a severely weakened state, prompting alarm from its initial author and environmental politicians.

"The regulation was gutted," stated Hugo Schally, pointing to the removal of key obligations for downstream traders to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, 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, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the hopes of over 1.2 million EU citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the toughest law proposed to combat deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. It faced two major postponements, reportedly over IT issues, which drew condemnation.

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

Originally, the law required companies to track commodities to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with criminal charges and large financial penalties.

"This was not red tape for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

However, the rigorous checks provoked opposition in Brussels from multinational corporations, exporting nations, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a decisive moment, creating a new political majority less favorable toward green regulations.

"The other pressure has come from major export markets like the United States," noted expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented Schally. "Moving obligations 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.

"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

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is key for business and national regulators to successfully implement this very important law."