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Originally hailed as a landmark law that would combat the worldwide crisis of forest loss.

But, the revised version of the European Union's deforestation regulation, once heralded as the crown jewel of the Green Deal, has been passed in a significantly diluted state, leading to criticism from its initial author and environmental politicians.

"It has been gutted," stated the law's original author, citing the exclusion of key obligations for downstream traders to verify the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

Political Dismantling

Green party MEP Marie Toussaint was more blunt, labeling 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 demands of more than a million European citizens who supported an initiative in 2020 calling for a ban on goods linked to forest destruction.

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

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. It faced significant delays, reportedly over technical problems, which drew condemnation.

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

Originally, the regulation mandated that firms to trace goods to their specific geographic origin using geolocation data, 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 said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

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

Experts cite last year's EU elections as a decisive moment, shifting the balance of power less favorable toward environmental rules.

"The other pressure has come from big trading partners outside the EU," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

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 option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening rules for companies, it stripped them back," said Schally. "Moving obligations 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 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

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

"The new text provides for predictability, which is key for business and competent authorities to effectively enforce this very important law."