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It was a groundbreaking regulation that would help stop the worldwide crisis of forest loss.

But, the final version of the European Union's deforestation regulation, once touted as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its original architect and environmental politicians.

"It has been stripped," said the law's original author, pointing to the removal of key obligations for later-stage companies to verify the provenance 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 make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental MEP Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of more than a million European citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the most ambitious legislation proposed to combat forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. It faced significant delays, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, authorities invited political interference," remarked Toussaint.

In its first draft, the regulation required companies to trace commodities to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the rigorous checks provoked opposition in Brussels from large companies, exporting nations, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority less favorable toward green regulations.

"The other pressure came from big trading partners like the United States," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law includes key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was created.
• A option for more reductions was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," lamented the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, stating: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

"The new text ensures stability, which is key for business and competent authorities to successfully implement this vitally important law."