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Widely celebrated as a pioneering law that would curb the worldwide scourge of forest loss.

But, the final version of the EU's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has been passed in a severely weakened state, prompting alarm from its original architect and environmental politicians.

"The regulation was gutted," stated the law's original author, pointing to the exclusion of key obligations for later-stage companies to verify 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.

Political Dismantling

Green party MEP Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – including 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 EU citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the most ambitious legislation proposed to combat deforestation."

A Story of Dilution

The law's unravelling is seen by critics as the EU walking back its environmental promises. The proposal encountered significant delays, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, authorities invited political interference," remarked 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 penalties and large financial penalties.

"This was not red tape for its own sake," Schally said. "It was the mechanism that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

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

Experts cite 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 big trading partners outside the EU," said expert Andreas Rasche, implying 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 mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said Schally. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into complying," said 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

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

"The revised regulation provides for predictability, which is crucial for companies and competent authorities to successfully implement this vitally important regulation."