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It was a groundbreaking regulation that would combat the global crisis of forest loss.

However, the final version of the EU's deforestation regulation, previously heralded as the flagship policy of the Green Deal, has emerged in a severely weakened state, prompting alarm from its original architect and green lawmakers.

"The regulation was hollowed out," stated Hugo Schally, citing the removal of crucial requirements for downstream traders to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that fewer obligated actors, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party vice-president a leading green politician was more blunt, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands of over 1.2 million EU citizens who signed a petition in 2020 demanding a ban on goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans called it "the most ambitious law proposed to combat deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. The proposal encountered significant delays, reportedly over IT issues, which drew condemnation.

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

Originally, the law mandated that firms to track goods back to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with penalties and hefty fines.

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

Intense Lobbying

Yet, the strict due diligence triggered a backlash in Brussels from large companies, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"Additional intense pressure came from major export markets like the United States," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was created.
• A option for more reductions was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening rules for companies, it rolled them back," lamented the law's author. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

The delays and changes have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," said 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

An EU representative supported the final law, stating: "The commission has responded to concerns and acted 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 regulation."