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It was a landmark law that would combat the global scourge of forest loss.

But, the revised version of the EU's deforestation regulation, once touted as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, prompting criticism from its initial author and green lawmakers.

"It has been gutted," stated Hugo Schally, citing the exclusion of crucial requirements for downstream traders to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Environmental MEP Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "systematic weakening" of the law.

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

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the toughest legislation ever put forward to combat forest loss."

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its environmental promises. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," commented the Green MEP.

In its first draft, the regulation mandated that firms to trace commodities back to their exact plot of land using GPS coordinates, making them liable for forest loss along their supply lines with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks triggered a backlash in Brussels from multinational corporations, exporting nations, rightwing parties and member states with forestry industries.

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

"The other pressure has come from major export markets outside the EU," noted expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said Schally. "By shifting responsibilities upstream, it reduced accountability."

Business Frustration

The delays and changes have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort into complying," said 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 major letdown."

Official Defense

An EU representative supported the final law, stating: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient implementation."

"The new text ensures stability, which is crucial for companies and competent authorities to effectively enforce this very important law."