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Originally hailed as a pioneering law that would curb the global crisis of forest loss.

But, the final version of the EU's deforestation regulation, once heralded as the flagship policy of the Green Deal, has emerged in a severely weakened state, leading to criticism from its original architect and green lawmakers.

"It has been gutted," said Hugo Schally, citing the exclusion of crucial requirements for later-stage companies to verify the provenance 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 imprecise sourcing details would complicate the task of authorities.

Political Dismantling

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

This outcome is a far cry from the demands of more than a million EU citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

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

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its green talk. The proposal encountered significant delays, ostensibly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a technical issue, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the regulation mandated that firms to trace goods back to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks provoked opposition in the EU capital from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"The other pressure has come from big trading partners outside the EU," noted corporate sustainability professor, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

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

"We feel very annoyed because we invested significant resources 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 major letdown."

The Commission's Stance

An EU representative supported the final law, saying: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient implementation."

"The revised regulation ensures stability, which is key for business and national regulators to effectively enforce this vitally important regulation."