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It was a landmark regulation that would curb the worldwide scourge of forest loss.

However, the final version of the European Union's deforestation regulation, once heralded 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 green lawmakers.

"The regulation was hollowed out," stated the law's original author, citing the removal of crucial requirements for downstream traders to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Green party MEP a leading green politician was more blunt, describing the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of over 1.2 million European citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

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

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. The proposal encountered two major postponements, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a technical issue, the commission opened Pandora’s box," commented Toussaint.

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

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks provoked opposition in Brussels from large companies, producer countries, rightwing parties and member states with forestry industries.

Experts cite last year's EU elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"Additional intense pressure has come from big trading partners like the United States," said corporate sustainability professor, implying the commission gave in to some demands in trade talks.

The Weakened Final Text

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped them back," said Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes 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 invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

"The new text ensures stability, which is key for business and national regulators to effectively enforce this very important regulation."