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Widely celebrated as a groundbreaking regulation that would help stop the worldwide scourge of forest loss.

However, the revised version of the EU's deforestation regulation, previously heralded as the flagship policy 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 the law's original author, pointing to the exclusion of crucial requirements for downstream traders to check the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Environmental vice-president a leading green politician was more blunt, describing the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of more than a 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 proposed to fight deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its green talk. It faced two major postponements, ostensibly over IT issues, which sparked criticism.

"By revisiting the legislation instead of solving a technical issue, authorities invited political interference," commented the Green MEP.

In its first draft, the law required companies to track goods back to their specific geographic origin 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," Schally explained. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

However, the rigorous checks provoked opposition in the EU capital from large companies, exporting nations, rightwing parties and member states with forestry industries.

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

"The other pressure has come from major export markets outside the EU," noted expert Andreas Rasche, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation includes several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," said Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Business Frustration

The delays and changes have also created annoyance for businesses that complied early.

"We feel very annoyed because we invested significant resources into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

Official Defense

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

"The new text provides for predictability, which is key for business and competent authorities to effectively enforce this very important regulation."