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Originally hailed as a groundbreaking regulation that would help stop the worldwide scourge of forest loss.

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

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

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party vice-president Marie Toussaint went further, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of more than a million EU 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 Frans Timmermans trumpeted it as "the most ambitious legislation proposed to fight forest loss."

From Ambition to Compromise

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

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

In its first draft, the regulation required companies to track goods back to their exact plot of land using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," the former official explained. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

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

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

"The other pressure came from major export markets like the United States," noted corporate sustainability professor, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

The passed law features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• 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.

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

Business Frustration

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

An EU representative defended the outcome, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is crucial for companies and national regulators to successfully implement this very important law."