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It was a groundbreaking law that would curb the worldwide crisis of deforestation.

However, the revised version of the EU's deforestation regulation, previously touted as the flagship policy of the Green Deal, has been passed in a severely weakened state, leading to criticism from its initial author and green lawmakers.

"The regulation was hollowed out," said Hugo Schally, citing the removal of crucial requirements for later-stage companies to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million European citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner called it "the toughest law ever put forward to combat deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. The proposal encountered significant delays, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a technical issue, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the regulation mandated that firms to trace commodities to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and hefty fines.

"This was not red tape for its own sake," Schally said. "It was the mechanism that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks provoked opposition in Brussels from multinational corporations, exporting nations, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a decisive moment, creating a new political majority less favorable toward environmental rules.

"The other pressure has come from big trading partners like the United States," said expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category 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 downstream obligations, it stripped 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 invested significant resources into preparing," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient application."

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