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Widely celebrated as a landmark law that would help stop the worldwide scourge of forest loss.

However, the final version of the EU's deforestation regulation, once heralded as the crown jewel of the European Green Deal, has emerged in a severely weakened state, leading to alarm from its initial author and environmental politicians.

"It has been gutted," stated Hugo Schally, pointing to the exclusion of crucial requirements for later-stage companies 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 less precise origin data would complicate the task of authorities.

Political Dismantling

Environmental MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "systematic weakening" of the law.

This final text stands in stark contrast to the hopes of more than a million EU citizens who signed a petition in 2020 calling for a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation proposed to fight forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. It faced significant delays, ostensibly over technical problems, which sparked criticism.

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

In its first draft, the law mandated that firms to track commodities to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in Brussels from large companies, producer countries, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, shifting the balance of power more skeptical of green regulations.

"The other pressure came from big trading partners like the United States," noted corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation features key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was created.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," said the law's author. "Moving obligations upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"It is very frustrating 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 supported the final law, saying: "The commission has responded to feedback and acted to ensure a pragmatic and balanced implementation."

"The new text ensures stability, which is key for business and national regulators to successfully implement this vitally important regulation."