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It was a landmark regulation that would curb the worldwide crisis of forest loss.

But, the revised version of the European Union's deforestation regulation, previously heralded as the flagship policy of the Green Deal, has been passed in a significantly diluted state, leading to alarm from its original architect and green lawmakers.

"The regulation was gutted," stated the law's original author, pointing to the exclusion of crucial requirements for later-stage companies to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Environmental MEP a leading green politician went further, describing the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the demands of over 1.2 million EU 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 called it "the most ambitious law ever put forward to combat forest loss."

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its environmental promises. It faced significant delays, reportedly over IT issues, which sparked criticism.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the law mandated that firms to track goods back to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," the former official said. "It was the mechanism that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, conservative political groups and EU logging states.

Experts cite last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"Additional intense pressure came from big trading partners like the United States," said corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation features several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new “low risk” category was created.
• A window for further "simplifications" was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening rules for companies, it rolled them back," said Schally. "Moving obligations to producers, it reduced accountability."

Business Frustration

The protracted process and revisions 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 invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

An EU representative defended the outcome, stating: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is crucial for companies and national regulators to successfully implement this very important regulation."