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Widely celebrated as a landmark regulation that would combat the global scourge of deforestation.

However, the final version of the European Union's deforestation regulation, once touted 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 gutted," said Hugo Schally, citing the exclusion of key obligations for later-stage companies to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the demands of over 1.2 million European citizens who supported an initiative 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 most ambitious legislation proposed to fight forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its environmental promises. It faced two major postponements, ostensibly over technical problems, which drew condemnation.

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

In its first draft, the law mandated that firms to trace goods to their exact plot of land using GPS coordinates, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, rightwing parties 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 green regulations.

"Additional intense pressure has come from big trading partners outside the EU," said expert Andreas Rasche, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new “low risk” category was created.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," lamented Schally. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"It is very frustrating because we put a lot of effort into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and taken action to ensure a pragmatic and balanced implementation."

"The new text ensures stability, which is crucial for companies and national regulators to effectively enforce this vitally important law."