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It was a groundbreaking piece of legislation that would curb the worldwide crisis of deforestation.

However, the final version of the European Union's deforestation regulation, previously heralded as the crown jewel of the European Green Deal, has been passed in a severely weakened state, prompting alarm from its initial author and environmental politicians.

"The regulation was hollowed out," said the law's original author, pointing to the exclusion of key obligations for downstream traders to check the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Green party MEP Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

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

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its green talk. The proposal encountered two major postponements, reportedly over IT issues, which sparked criticism.

"By revisiting the legislation instead of solving a technical issue, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation required companies 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.

"It wasn't bureaucracy for its own sake," the former official said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

However, the rigorous checks triggered a backlash in the EU capital from multinational corporations, producer countries, conservative political groups and EU logging states.

Experts cite last year's EU elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"The other pressure came from big trading partners outside the EU," noted expert Andreas Rasche, implying the commission gave in to some requests during negotiations.

The Weakened Final Text

The passed law includes several critical weakenings:

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

"Instead of tightening downstream obligations, it stripped them back," said the law's author. "By shifting responsibilities upstream, 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.

"We feel very annoyed because we invested significant resources into complying," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

A commission spokesperson supported the final law, saying: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

"The revised regulation provides for predictability, which is key for business and national regulators to effectively enforce this very important law."