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Originally hailed as a landmark piece of legislation that would help stop the worldwide crisis of forest loss.

But, the final version of the EU's deforestation regulation, once touted as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, leading to criticism from its initial author and green lawmakers.

"It has been gutted," said the law's original author, pointing to the removal of crucial requirements for downstream traders to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling 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 demands of over 1.2 million European citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious law ever put forward to combat deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a technical issue, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation required companies to track goods back to their specific geographic origin 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," the former official said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in Brussels from large companies, producer countries, rightwing parties and member states with forestry industries.

Experts cite last year's European Parliament elections as a decisive moment, shifting the balance of power less favorable toward environmental rules.

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

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it stripped them back," said the law's author. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions 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 purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, saying: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient implementation."

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