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It was a pioneering regulation that would help stop the global crisis of forest loss.

However, the revised version of the European Union's deforestation regulation, previously heralded as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, leading to alarm from its initial author and environmental politicians.

"The regulation was stripped," said Hugo Schally, citing the removal of key obligations for later-stage companies to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental vice-president Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – including one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the hopes of more than a million European citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the toughest legislation proposed to fight forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. The proposal encountered two major postponements, ostensibly over IT issues, which sparked criticism.

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

In its first draft, the law required companies to trace goods back to their exact plot of land using GPS coordinates, holding them accountable for forest loss along their supply lines with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "These rules were the tool that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

Yet, the rigorous checks triggered a backlash in the EU capital from multinational corporations, exporting nations, rightwing parties and EU logging states.

Experts cite last year's EU elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

"The other pressure came from big trading partners like the United States," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

The passed law includes several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was created.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," lamented Schally. "By shifting responsibilities to producers, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"It is very frustrating because we invested significant resources into preparing," 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 supported the final law, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

"The revised regulation ensures stability, which is crucial for companies and competent authorities to successfully implement this very important regulation."