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Originally hailed as a groundbreaking regulation that would combat the global crisis of deforestation.

However, the final version of the European Union's deforestation regulation, previously touted as the flagship policy of the Green Deal, has emerged in a significantly diluted state, prompting criticism from its initial author and environmental politicians.

"It has been gutted," stated Hugo Schally, pointing to the exclusion of crucial requirements for downstream traders to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party MEP a leading green politician went further, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the hopes of over 1.2 million European citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the most ambitious law proposed to fight forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," remarked the Green MEP.

In its first draft, the regulation required companies to trace goods to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and hefty fines.

"This was not red tape for its own sake," Schally explained. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks provoked opposition in Brussels from large companies, producer countries, conservative political groups 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 came from major export markets like the United States," said expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

In the final legislation features key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it rolled them back," said Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Uncertainty for Companies

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

"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."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient application."

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