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Originally hailed as a groundbreaking piece of legislation that would combat the global crisis of forest loss.

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

"It has been gutted," said Hugo Schally, pointing to the removal of key obligations for later-stage companies to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

A Watered-Down Law

Green party vice-president Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the hopes of over 1.2 million European citizens who signed a petition in 2020 calling for 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 law proposed to combat forest loss."

From Ambition to Compromise

The law's unravelling has been interpreted as the EU walking back its green talk. It faced two major postponements, ostensibly over technical problems, which drew condemnation.

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

Originally, the regulation required companies to trace goods back to their specific geographic origin using GPS coordinates, holding them accountable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a turning point, shifting the balance of power more skeptical of environmental rules.

"The other pressure came from big trading partners outside the EU," noted expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

The Weakened Final Text

The passed law features key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," said Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

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

"It is very frustrating because we invested significant resources into preparing," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

Official Defense

A commission spokesperson defended the outcome, saying: "We have listened to feedback and acted to ensure a simple, fair and cost-efficient implementation."

"The new text ensures stability, which is crucial for companies and national regulators to successfully implement this very important regulation."