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It was a groundbreaking law that would help stop the global scourge of forest loss.

But, the final version of the EU's deforestation regulation, previously touted as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, prompting criticism from its original architect and environmental politicians.

"It has been gutted," said Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

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

This outcome stands in stark contrast to the hopes of more than a million EU citizens who supported an initiative in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest legislation ever put forward to fight deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. The proposal encountered significant delays, reportedly over IT issues, which sparked criticism.

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

In its first draft, the law mandated that firms to trace goods back to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"This was not red tape for its own sake," Schally explained. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Experts cite last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"The other pressure has come from major export markets like the United States," noted corporate sustainability professor, implying the commission gave in to some requests during negotiations.

The Weakened Final Text

In the final legislation features key dilutions:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was created.
• A window for further "simplifications" was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," said the law's author. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

An EU representative defended the outcome, stating: "We have listened to feedback and taken action to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is key for business and national regulators to effectively enforce this very important law."