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It was a landmark law that would help stop the worldwide scourge of deforestation.

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

"The regulation was stripped," stated Hugo Schally, pointing to the removal of key obligations for later-stage companies to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president Marie Toussaint was more blunt, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from 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 trumpeted it as "the most ambitious legislation ever put forward to combat deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. It faced significant delays, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a technical issue, the commission opened Pandora’s box," commented the Green MEP.

Originally, the law mandated that firms to trace goods to their specific geographic origin 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 opaque production networks."

Intense Lobbying

However, the rigorous checks triggered a backlash in Brussels from multinational corporations, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's EU elections as a turning point, creating a new political majority more skeptical of green regulations.

"Additional intense pressure came from major export markets like the United States," noted expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

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

"Instead of tightening downstream obligations, it rolled them back," said the law's author. "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.

"We feel very annoyed because we put a lot of effort into complying," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

An EU representative supported the final law, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced application."

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