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

But, 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 severely weakened state, leading to alarm from its initial author and environmental politicians.

"The regulation was gutted," said the law's original author, citing the removal of crucial requirements for downstream traders to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Environmental MEP Marie Toussaint went further, describing the delays, loopholes and exemptions – including one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the demands of more than a million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner called it "the toughest legislation ever put forward to fight deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its green talk. It faced two major postponements, reportedly over technical problems, which drew condemnation.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

Originally, the law required companies to trace commodities to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in Brussels from multinational corporations, exporting nations, conservative political groups 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.

"Additional intense pressure has come from big trading partners like the United States," said expert Andreas Rasche, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," said Schally. "By shifting responsibilities to producers, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into preparing," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

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

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