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Widely celebrated as a groundbreaking piece of legislation that would curb the global crisis of deforestation.

However, the revised version of the European Union's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, leading to alarm from its original architect and environmental politicians.

"It has been stripped," stated Hugo Schally, pointing to the removal of crucial requirements for later-stage companies to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party vice-president Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the demands of over 1.2 million EU citizens who signed a petition in 2020 calling for a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious 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 reopening this file instead of solving a technical issue, authorities invited political interference," remarked the Green MEP.

In its first draft, the regulation required companies to trace goods back to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

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

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

"The other pressure came from big trading partners like the United States," noted expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it stripped them back," said Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

An EU representative supported the final law, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient implementation."

"The new text ensures stability, which is key for business and national regulators to successfully implement this vitally important regulation."