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Widely celebrated as a landmark law that would help stop the worldwide crisis of deforestation.

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

"The regulation was gutted," said Hugo Schally, pointing to the exclusion of crucial requirements for later-stage companies to check the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

A Watered-Down Law

Environmental MEP Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – such as 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 EU citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the toughest legislation proposed to combat deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its environmental promises. The proposal encountered two major postponements, ostensibly over IT issues, which drew condemnation.

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

In its first draft, the regulation mandated that firms to track commodities to their exact plot of land using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a turning point, shifting the balance of power more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," noted expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new exemption for small operators was created.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented the law's author. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we invested significant resources into preparing," stated a coffee company executive. "We invested in software, followed seminars and built a team... 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, saying: "We have listened to concerns and taken action to ensure a simple, fair and cost-efficient implementation."

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