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It was a groundbreaking piece of legislation that would combat the global scourge of forest loss.

However, 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 green lawmakers.

"The regulation was gutted," stated Hugo Schally, citing the exclusion of key obligations for downstream traders to check the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, less information collected, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Green party vice-president Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of over 1.2 million EU citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

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

A Story of Dilution

The law's unravelling is seen by critics as the European Union retreating from its green talk. It faced two major postponements, reportedly over IT issues, which sparked criticism.

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

Originally, the regulation mandated that firms to track commodities to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the rigorous checks triggered a backlash in Brussels from large companies, exporting nations, conservative political groups and EU logging states.

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

"The other pressure has come from major export markets like the United States," noted expert Andreas Rasche, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation features key dilutions:

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

"Rather than strengthening rules for companies, it rolled them back," lamented Schally. "By shifting responsibilities to producers, it reduced accountability."

Business Frustration

The delays and changes have also created annoyance for companies that prepared in advance.

"It is very frustrating because we invested significant resources into preparing," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

A commission spokesperson defended the outcome, stating: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced implementation."

"The revised regulation provides for predictability, which is crucial for companies and competent authorities to successfully implement this vitally important regulation."