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Widely celebrated as a groundbreaking piece of legislation that would curb the worldwide scourge of deforestation.

However, the final version of the EU's deforestation regulation, once touted as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, prompting alarm from its original architect and green lawmakers.

"The regulation was hollowed out," stated Hugo Schally, citing the exclusion of crucial requirements for downstream traders to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party MEP Marie Toussaint went further, describing the postponements, exceptions and new loopholes – such as one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the hopes of more than a million European citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief the European commissioner called it "the most ambitious law proposed to combat forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its environmental promises. The proposal encountered two major postponements, ostensibly over technical problems, which drew condemnation.

"By reopening this file rather than fixing a simple IT problem, authorities invited political interference," commented Toussaint.

In its first draft, the regulation required companies to track goods back to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels from large companies, producer countries, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a decisive moment, creating a new political majority more skeptical of environmental rules.

"The other pressure came from major export markets like the United States," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

The Weakened Final Text

In the final legislation includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

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

Uncertainty for Companies

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we put a lot of effort into complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

A commission spokesperson supported the final law, stating: "We have listened to feedback and acted to ensure a pragmatic and balanced application."

"The new text provides for predictability, which is crucial for companies and competent authorities to effectively enforce this vitally important law."