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Originally hailed as a landmark regulation that would help stop the global scourge of forest loss.

But, the final version of the EU's deforestation regulation, previously touted as the flagship policy of the Green Deal, has been passed in a significantly diluted state, leading to alarm from its original architect and environmental politicians.

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

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

Political Dismantling

Green party MEP Marie Toussaint went further, describing the delays, loopholes and exemptions – such as one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the toughest law proposed to fight deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

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

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in Brussels from large companies, exporting nations, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a decisive moment, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from major export markets outside the EU," noted corporate sustainability professor, suggesting the commission gave in to some demands in trade talks.

The Weakened Final Text

The passed law includes several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it rolled them back," said Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

A commission spokesperson supported the final law, stating: "We have listened to feedback and acted to ensure a pragmatic and balanced application."

"The revised regulation ensures stability, which is key for business and national regulators to successfully implement this vitally important regulation."