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Widely celebrated as a groundbreaking piece of legislation that would curb the global scourge of forest loss.

However, the final version of the European Union's deforestation regulation, once touted as the crown jewel of the European Green Deal, has been passed in a severely weakened state, prompting criticism from its initial author and green lawmakers.

"It has been stripped," said Hugo Schally, citing the exclusion of key obligations 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 imprecise sourcing details 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 paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the hopes of more than a million European citizens who signed a petition in 2020 demanding a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner trumpeted it as "the toughest law proposed to combat forest loss."

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its environmental promises. It faced significant delays, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, authorities invited political interference," commented the Green MEP.

In its first draft, the law mandated that firms to trace commodities to their specific geographic origin using GPS coordinates, holding them accountable for forest loss along their supply lines with criminal charges and hefty fines.

"This was not red tape for its own sake," the former official said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

Yet, the rigorous checks provoked opposition in the EU capital from large companies, exporting nations, rightwing parties and EU logging states.

Experts cite last year's EU elections as a turning point, creating a new political majority more skeptical of green regulations.

"Additional intense pressure has come from big trading partners like the United States," said expert Andreas Rasche, implying the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• 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 – geopolitical adversaries of the EU – will face “high risk” scrutiny.

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

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

A commission spokesperson supported the final law, stating: "We have listened to feedback and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation provides for predictability, which is key for business and national regulators to successfully implement this vitally important regulation."