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It was a pioneering law that would curb the worldwide scourge of deforestation.

However, the final version of the EU's deforestation regulation, previously touted as the crown jewel of the Green Deal, has been passed in a significantly diluted state, prompting criticism from its initial author and environmental politicians.

"It has been hollowed out," stated Hugo Schally, pointing to the removal of key obligations for later-stage companies to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would complicate the task of authorities.

Political Dismantling

Environmental vice-president Marie Toussaint went further, labeling 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 hopes of over 1.2 million EU citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief Frans Timmermans called it "the most ambitious legislation ever put forward to fight deforestation."

A Story of Dilution

The law's unravelling is seen by critics as the European Union retreating from its green talk. It faced significant delays, ostensibly over IT issues, which sparked criticism.

"By revisiting the legislation instead of solving a technical issue, the commission opened Pandora’s box," commented Toussaint.

Originally, the regulation mandated that firms 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," 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 complex supply chains."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from large companies, producer countries, rightwing parties and EU logging states.

Experts cite last year's EU elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"The other pressure has come from major export markets like the United States," noted corporate sustainability professor, suggesting the commission gave in to some demands in trade talks.

The Weakened Final Text

In the final legislation includes several critical weakenings:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it rolled them back," said Schally. "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.

"It is very frustrating because we put a lot of effort into complying," said Xavier Rombouts. "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 taken action to ensure a pragmatic and balanced implementation."

"The revised regulation provides for predictability, which is key for business and national regulators to successfully implement this very important regulation."