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Originally hailed as a pioneering law that would curb the global scourge of deforestation.

But, the final version of the EU's deforestation regulation, previously heralded 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.

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

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would complicate the task of authorities.

Political Dismantling

Green party MEP a leading green politician was more blunt, describing the delays, loopholes and exemptions – including one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief the European commissioner trumpeted it as "the most ambitious law ever put forward to combat forest loss."

A Story of Dilution

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 drew condemnation.

"By revisiting the legislation instead of solving a technical issue, authorities invited political interference," remarked Toussaint.

In its first draft, the regulation required companies to track commodities back to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains 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 made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks provoked opposition in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

Experts cite last year's EU elections as a turning point, shifting the balance of power more skeptical of environmental rules.

"The other pressure has come from big trading partners outside the EU," noted expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

"We feel very annoyed because we invested significant resources into complying," 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 defended the outcome, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation provides for predictability, which is key for business and competent authorities to effectively enforce this vitally important law."