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Widely celebrated as a landmark regulation that would combat the worldwide scourge of deforestation.

However, the final version of the EU'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 green lawmakers.

"The regulation was stripped," said the law's original author, pointing to the removal of key obligations for later-stage companies to check the origin 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

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

This outcome stands in stark contrast to the hopes of over 1.2 million European citizens who supported an initiative in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans called it "the toughest legislation ever put forward to fight forest loss."

From Ambition to Compromise

The law's unravelling has been interpreted as the EU walking back its green talk. The proposal encountered two major postponements, reportedly over IT issues, which sparked criticism.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," remarked the Green MEP.

In its first draft, the regulation required companies to track commodities to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

However, the strict due diligence provoked opposition in the EU capital from large companies, exporting nations, rightwing parties and EU logging states.

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

"The other pressure came from big trading partners outside the EU," said corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was created.
• 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 downstream obligations, it rolled them back," said the law's author. "Moving obligations to producers, 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 put a lot of effort 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

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

"The new text ensures stability, which is key for business and national regulators to effectively enforce this very important regulation."