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It was a landmark regulation that would curb the global scourge of deforestation.

However, the final version of the EU's deforestation regulation, previously heralded as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its original architect and green lawmakers.

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

He warned that fewer obligated actors, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

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

This outcome stands in stark contrast to the demands of more than a million EU citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief the European commissioner called it "the toughest legislation proposed to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. It faced significant delays, ostensibly over IT issues, which sparked criticism.

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

Originally, the regulation mandated that firms to track commodities to their specific geographic origin using geolocation data, making them liable for forest loss along their supply lines with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence provoked opposition in Brussels from large companies, exporting nations, rightwing parties and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from big trading partners like the United States," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening rules for companies, it rolled them back," said the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Business Frustration

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

"It is very frustrating because we invested significant resources into complying," said a coffee company executive. "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 defended the outcome, stating: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient implementation."

"The revised regulation provides for predictability, which is crucial for companies and competent authorities to successfully implement this vitally important law."