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Widely celebrated as a landmark regulation that would help stop the global scourge of deforestation.

But, the revised version of the EU's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has been passed in a severely weakened state, prompting alarm from its initial author and green lawmakers.

"The regulation was hollowed out," said the law's original author, citing the exclusion of crucial requirements for later-stage companies to check the origin 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 complicate the task of authorities.

Political Dismantling

Environmental MEP Marie Toussaint was more blunt, describing the postponements, exceptions and new loopholes – such as one for printed products – 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 supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the toughest legislation proposed to fight forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

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

Originally, the regulation mandated that firms to trace commodities to their exact plot of land using GPS coordinates, holding them accountable for forest loss along their supply lines with criminal charges and large financial penalties.

"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 strict due diligence triggered a backlash in the EU capital from large companies, exporting nations, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, creating a new political majority more skeptical of environmental rules.

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

Key Loopholes Introduced

In the final legislation features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," said the law's author. "Moving obligations upstream, it lessened the number of responsible firms."

Uncertainty for Companies

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

"We feel very annoyed because we invested significant resources into preparing," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative supported the final law, stating: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced application."

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