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It was a groundbreaking regulation that would curb the worldwide scourge of forest loss.

However, the revised version of the EU's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has emerged in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"It has been hollowed out," stated Hugo Schally, 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 less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president a leading green politician 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 over 1.2 million EU citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the most ambitious law proposed to fight forest loss."

From Ambition to Compromise

The law's unravelling has been interpreted as the European Union retreating from its environmental promises. The proposal encountered two major postponements, ostensibly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," remarked Toussaint.

In its first draft, the regulation required companies to track commodities to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally explained. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

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

Analysts point to last year's European Parliament elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from big trading partners like the United States," noted expert Andreas Rasche, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it rolled them back," lamented the law's author. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

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

"It is very frustrating because we put a lot of effort into preparing," said a coffee company executive. "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

An EU representative defended the outcome, stating: "The commission has responded to feedback and taken action to ensure a pragmatic and balanced application."

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