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Originally hailed as a pioneering regulation that would help stop the worldwide crisis of forest loss.

However, the final version of the European Union's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, leading to alarm from its initial author and green lawmakers.

"The regulation was hollowed out," said the law's original author, pointing to the exclusion of key obligations for later-stage companies to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

Political Dismantling

Environmental MEP Marie Toussaint went further, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of more than a million EU citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the toughest law proposed to combat forest loss."

A Story of Dilution

The law's unravelling is seen by critics as the European Union retreating from its green talk. The proposal encountered significant delays, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, authorities invited political interference," commented the Green MEP.

Originally, the law required companies to track goods back 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 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

However, the rigorous checks triggered a backlash in Brussels from large companies, producer countries, rightwing parties and EU logging states.

Experts cite last year's EU elections as a turning point, shifting the balance of power more skeptical of green regulations.

"Additional intense pressure has come from major export markets outside the EU," said expert Andreas Rasche, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category was introduced.
• A option for more reductions was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped them back," said Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

A commission spokesperson supported the final law, saying: "The commission has responded to concerns and acted to ensure a simple, fair and cost-efficient implementation."

"The revised regulation provides for predictability, which is key for business and competent authorities to effectively enforce this vitally important regulation."