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It was a groundbreaking piece of legislation that would help stop the global scourge of forest loss.

But, the revised version of the EU's deforestation regulation, once touted as the flagship policy of the Green Deal, has emerged in a significantly diluted state, leading to alarm from its original architect and green lawmakers.

"It has been gutted," stated Hugo Schally, pointing to the exclusion 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.

Political Dismantling

Environmental MEP a leading green politician went further, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This final text stands in stark contrast to the hopes of over 1.2 million European citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest legislation ever put forward to combat deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. The proposal encountered significant delays, reportedly over IT issues, which sparked criticism.

"By reopening this file instead of solving a technical issue, the commission opened Pandora’s box," remarked the Green MEP.

In its first draft, the law mandated that firms to trace commodities to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official said. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels from multinational corporations, 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 green regulations.

"Additional intense pressure came from big trading partners outside the EU," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators 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 stripped them back," said Schally. "Moving obligations upstream, it reduced accountability."

Business Frustration

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

"We feel very annoyed because we put a lot of effort into preparing," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

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 application."

"The revised regulation ensures stability, which is crucial for companies and competent authorities to effectively enforce this vitally important regulation."