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It was a pioneering law that would help stop the global crisis of forest loss.

However, the final version of the European Union's deforestation regulation, once touted as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, prompting alarm from its initial author and environmental politicians.

"It has been gutted," said the law's original author, citing the removal of crucial requirements for downstream traders to verify the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

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

This outcome is a far cry from the hopes of more than a million EU citizens who signed a petition in 2020 calling for 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 combat deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced significant delays, ostensibly over technical problems, which sparked criticism.

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

Originally, the law mandated that firms to trace commodities to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

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

Intense Lobbying

Yet, the strict due diligence provoked opposition in Brussels from large companies, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, creating a new political majority more skeptical of environmental rules.

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

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening rules for companies, it stripped them back," lamented the law's author. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

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," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

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

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