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It was a pioneering law that would combat the global crisis of deforestation.

But, the final version of the EU's deforestation regulation, once heralded as the crown jewel of the European Green Deal, has been passed in a severely weakened state, leading to alarm from its original architect and environmental politicians.

"The regulation was hollowed out," stated Hugo Schally, 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 complicate the task of authorities.

Political Dismantling

Green party MEP a leading green politician went further, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This outcome is a far cry from the demands of over 1.2 million EU citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its green talk. It faced significant delays, reportedly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

Originally, the regulation mandated that firms to trace goods back to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains 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 complex supply chains."

Intense Lobbying

However, the strict due diligence provoked opposition in the EU capital from multinational corporations, producer countries, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, creating a new political majority less favorable toward green regulations.

"The other pressure has come from big trading partners outside the EU," said expert Andreas Rasche, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was created.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," said the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"We feel very annoyed 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

An EU representative supported the final law, stating: "We have listened to feedback and taken action to ensure a pragmatic and balanced implementation."

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