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

But, the revised version of the European Union's deforestation regulation, previously heralded as the flagship policy of the European Green Deal, has emerged in a severely weakened state, leading to criticism from its initial author and environmental politicians.

"The regulation was gutted," said the law's original author, pointing to the removal of crucial requirements for later-stage companies to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Environmental MEP Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the hopes of more than a million EU citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

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

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. The proposal encountered significant delays, ostensibly over IT issues, which sparked criticism.

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

In its first draft, the regulation mandated that firms to trace commodities back to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from large companies, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, creating a new political majority more skeptical of green regulations.

"Additional intense pressure has come from major export markets outside the EU," said expert Andreas Rasche, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

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

Business Frustration

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

"We feel very annoyed because we invested significant resources into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

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

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