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Widely celebrated as a pioneering piece of legislation that would help stop the worldwide scourge of forest loss.

But, the revised version of the European Union's deforestation regulation, once touted as the crown jewel of the Green Deal, has been passed in a severely weakened state, prompting criticism from its initial author and environmental politicians.

"It has been gutted," stated the law's original author, pointing to the exclusion of crucial requirements for later-stage companies to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president a leading green politician was more blunt, describing the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the demands of more than a million EU citizens who signed a petition in 2020 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious law proposed to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its environmental promises. It faced significant delays, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," commented the Green MEP.

In its first draft, the law mandated that firms to track goods back to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with criminal charges and large financial penalties.

"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."

Mounting Pressure

Yet, the strict due diligence provoked opposition in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority more skeptical of green regulations.

"Additional intense pressure came from major export markets like the United States," said expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," said Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Business Frustration

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

"It is very frustrating because we put a lot of effort into complying," stated a coffee company executive. "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

An EU representative defended the outcome, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

"The new text provides for predictability, which is key for business and national regulators to successfully implement this vitally important law."