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Originally hailed as a pioneering piece of legislation that would combat the global crisis of deforestation.

However, the revised version of the European Union's deforestation regulation, once heralded as the crown jewel of the European Green Deal, has emerged in a severely weakened state, prompting alarm from its initial author and green lawmakers.

"It has been gutted," stated Hugo Schally, citing the exclusion of key obligations for downstream traders to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Green party vice-president Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the demands of more than a million European citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the toughest law ever put forward to fight forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its green talk. The proposal encountered significant delays, reportedly over IT issues, which sparked criticism.

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

Originally, the law mandated that firms to track goods back to their specific geographic origin using geolocation data, holding them accountable for forest loss along their supply lines with criminal charges and hefty fines.

"This was not red tape for its own sake," the former official said. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital 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 has come from major export markets like the United States," noted expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• 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 downstream obligations, it rolled them back," lamented Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

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," 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 big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "We have listened to concerns and taken action to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is key for business and national regulators to successfully implement this vitally important law."