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It was a groundbreaking piece of legislation that would curb the worldwide scourge of deforestation.

But, the final version of the European Union's deforestation regulation, once touted as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"The regulation was gutted," stated Hugo Schally, citing the removal of key obligations for later-stage companies to verify the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would hinder monitoring and legal action.

Political Dismantling

Green party vice-president a leading green politician was more blunt, labeling 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 signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious law ever put forward to fight forest loss."

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its green talk. It faced significant delays, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, authorities invited political interference," remarked Toussaint.

Originally, the law required companies to track commodities back to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," Schally explained. "It was the mechanism that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

Yet, the strict due diligence provoked opposition in Brussels from large companies, producer countries, rightwing parties and EU logging states.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"The other pressure has come from major export markets outside the EU," said corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A option for more reductions was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," lamented the law's author. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also created annoyance 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 purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

An EU representative defended the outcome, saying: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

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