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

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 significantly diluted state, leading to criticism from its initial author and green lawmakers.

"The regulation was stripped," stated the law's original author, citing the exclusion of crucial requirements for later-stage companies 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.

Political Dismantling

Green party MEP Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – such as one for printed products – as the "systematic weakening" 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 ban on goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious legislation proposed to combat deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced significant delays, reportedly over IT issues, which sparked criticism.

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

In its first draft, the law required companies to track goods back to their exact plot of land 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," the former official said. "These rules were the tool 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 triggered a backlash in Brussels from multinational corporations, producer countries, rightwing parties and EU logging states.

Analysts point to last year's EU elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from major export markets outside the EU," said expert Andreas Rasche, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," said Schally. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

An EU representative defended the outcome, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is key for business and competent authorities to effectively enforce this vitally important law."