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It was a groundbreaking regulation that would help stop the worldwide scourge of deforestation.

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

"It has been hollowed out," said the law's original author, 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.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Green party vice-president a leading green politician went further, describing the delays, loopholes and exemptions – including one for printed products – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million EU citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

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

A Story of Dilution

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

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

In its first draft, the regulation mandated that firms to trace goods back to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with penalties and hefty fines.

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

Intense Lobbying

However, the strict due diligence provoked opposition in the EU capital from large companies, exporting nations, rightwing parties and member states with forestry industries.

Experts cite last year's European Parliament elections as a turning point, creating a new political majority less favorable toward environmental rules.

"The other pressure has come from major export markets outside the EU," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law includes several critical weakenings:

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

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

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into preparing," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, stating: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient application."

"The revised regulation provides for predictability, which is key for business and competent authorities to successfully implement this very important law."