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Originally hailed as a groundbreaking piece of legislation that would help stop the worldwide scourge of deforestation.

However, the final version of the European Union's deforestation regulation, previously touted as the crown jewel of the European Green Deal, has been passed in a severely weakened state, leading to criticism from its original architect and green lawmakers.

"The regulation was stripped," said Hugo Schally, pointing to the exclusion of crucial requirements for later-stage companies to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would complicate the task of authorities.

Political Dismantling

Environmental MEP a leading green politician was more blunt, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of over 1.2 million EU citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest law ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced two major postponements, ostensibly over technical problems, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

Originally, the law required companies to trace commodities to their specific geographic origin using GPS coordinates, making them liable for forest loss along their supply lines with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, 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, shifting the balance of power less favorable toward environmental rules.

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

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented the law's author. "Moving obligations upstream, it reduced accountability."

Business Frustration

The delays and changes have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we invested significant resources 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 major letdown."

Official Defense

An EU representative defended the outcome, saying: "The commission has responded to feedback and acted to ensure a pragmatic and balanced implementation."

"The revised regulation ensures stability, which is key for business and competent authorities to successfully implement this vitally important law."