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Widely celebrated as a pioneering piece of legislation that would help stop the global crisis of forest loss.

However, the revised version of the European Union's deforestation regulation, once touted as the crown jewel of the Green Deal, has been passed in a significantly diluted state, leading to criticism from its initial author and environmental politicians.

"It has been gutted," said the law's original author, citing the removal of key obligations for later-stage companies to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would complicate the task of authorities.

Political Dismantling

Green party MEP Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "political dismantling" of the law.

This final text is a far cry from the demands of over 1.2 million European citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious legislation ever put forward to fight forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its green talk. The proposal encountered significant delays, ostensibly over technical problems, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation mandated that firms to trace goods to their exact plot of land using GPS coordinates, 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, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the rigorous checks provoked opposition in the EU capital from multinational corporations, producer countries, conservative political groups and EU logging states.

Experts cite last year's European Parliament elections as a turning point, creating a new political majority more skeptical of environmental rules.

"The other pressure came from major export markets like the United States," said corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

The passed law features 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 – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said Schally. "Moving obligations upstream, it reduced accountability."

Business Frustration

The delays and changes have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

An EU representative defended the outcome, saying: "The commission has responded to concerns and acted to ensure a pragmatic and balanced implementation."

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