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It was a pioneering piece of legislation that would curb the global crisis of deforestation.

But, the final version of the EU's deforestation regulation, previously touted as the crown jewel of the Green Deal, has been passed in a severely weakened state, prompting alarm from its original architect and green lawmakers.

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

He warned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party MEP Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of over 1.2 million EU citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the toughest law ever put forward to fight deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. It faced two major postponements, reportedly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the law mandated that firms to trace commodities to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"This was not red tape for its own sake," Schally explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the strict due diligence provoked opposition in the EU capital from large companies, exporting nations, conservative political groups and EU logging states.

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

"Additional intense pressure came from big trading partners outside the EU," said expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was established 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 Schally. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort 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 big frustration."

Official Defense

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

"The revised regulation ensures stability, which is crucial for companies and national regulators to successfully implement this very important law."