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Originally hailed as a groundbreaking regulation that would combat the global crisis of deforestation.

But, the final version of the European Union's deforestation regulation, once heralded as the crown jewel 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 hollowed out," stated the law's original author, citing the removal of crucial requirements for later-stage companies to verify the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental MEP a leading green politician was more blunt, labeling the delays, loopholes and exemptions – including one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the demands of more than a million European citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

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

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its green talk. The proposal encountered significant delays, ostensibly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a technical issue, the commission opened Pandora’s box," remarked the Green MEP.

In its first draft, the regulation mandated that firms to track goods to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that made the rules enforceable, 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, exporting nations, rightwing parties and EU logging states.

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

"Additional intense pressure came from major export markets outside the EU," said expert Andreas Rasche, suggesting the commission gave in to some demands in trade talks.

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 introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

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

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we invested significant resources 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

A commission spokesperson supported the final law, saying: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient implementation."

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