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Originally hailed as a pioneering piece of legislation that would curb the worldwide crisis of forest loss.

However, 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, leading to alarm from its initial author and environmental politicians.

"It has been stripped," said Hugo Schally, pointing to the removal of key obligations for later-stage companies to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that fewer obligated actors, fewer data points, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Green party vice-president Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "systematic weakening" of the law.

This final text stands in stark contrast to the hopes of more than a million EU citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the toughest legislation proposed to fight deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced significant delays, ostensibly over technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a technical issue, authorities invited political interference," remarked Toussaint.

Originally, the regulation mandated that firms to track commodities to their exact plot of land using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties and hefty fines.

"This was not red tape for its own sake," the former official explained. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

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.

Experts cite last year's EU elections as a decisive moment, creating a new political majority less favorable toward environmental rules.

"The other pressure came from big trading partners outside the EU," noted corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

The passed law features several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category 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 rolled them back," lamented Schally. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," stated 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: "The commission has responded to feedback and acted to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is crucial for companies and national regulators to effectively enforce this vitally important law."