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Originally hailed as a pioneering law that would help stop the global scourge of deforestation.

But, the final version of the EU's deforestation regulation, once heralded as the crown jewel of the Green Deal, has been passed in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"It has been hollowed out," stated Hugo Schally, pointing to the removal of key obligations for downstream traders to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

Political Dismantling

Environmental MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as 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 signed a petition in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the toughest law proposed to fight forest loss."

From Ambition to Compromise

The law's unravelling has been interpreted as the EU walking back its environmental promises. The proposal encountered significant delays, reportedly over technical problems, which drew condemnation.

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

In its first draft, the law required companies to track commodities to their specific geographic origin using GPS coordinates, making them liable for forest loss along their supply lines with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in Brussels from large companies, producer countries, conservative political groups 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.

"Additional intense pressure has come from big trading partners outside the EU," said expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was introduced.
• A option for more reductions was opened 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 rolled them back," said Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The delays and changes have also caused frustration for companies that prepared in advance.

"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 major letdown."

The Commission's Stance

An EU representative supported the final law, saying: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient implementation."

"The revised regulation provides for predictability, which is key for business and national regulators to effectively enforce this vitally important law."