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It was a landmark regulation that would combat the global crisis of forest loss.

But, the final version of the EU's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has emerged in a severely weakened state, prompting criticism from its initial author and environmental politicians.

"The regulation was gutted," said the law's original author, citing the removal of crucial requirements for later-stage companies to check the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Green party MEP Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the demands of more than a million EU citizens who signed a petition in 2020 demanding a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest legislation ever put forward to combat forest loss."

A Story of Dilution

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

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," remarked Toussaint.

Originally, the regulation mandated that firms to track goods to their specific geographic origin using geolocation data, 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. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

Experts cite last year's European Parliament elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure has come from major export markets like the United States," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented Schally. "By shifting responsibilities upstream, it reduced accountability."

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, saying: "The commission has responded to feedback and acted to ensure a pragmatic and balanced implementation."

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