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It was a landmark regulation that would combat the worldwide crisis of forest loss.

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

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

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Green party MEP a leading green politician went further, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who signed a petition in 2020 demanding a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the toughest law ever put forward to fight deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its environmental promises. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," commented 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 penalties and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

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, creating a new political majority more skeptical of green regulations.

"The other pressure has come from major export markets outside the EU," noted corporate sustainability professor, suggesting the commission gave in to some demands in trade talks.

The Weakened Final Text

The passed law features several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," lamented Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"It is very frustrating because we invested significant resources into complying," said 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."

Official Defense

An EU representative supported the final law, stating: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced application."

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