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

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, leading to criticism from its initial author and green lawmakers.

"The regulation was gutted," said the law's original author, pointing to the removal of key obligations for downstream traders to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

Political Dismantling

Green party vice-president Marie Toussaint went further, labeling the delays, loopholes and exemptions – including one for printed products – as the "systematic weakening" of the law.

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

When launched in 2021, the EU's climate chief Frans Timmermans called it "the toughest legislation ever put forward to combat forest loss."

A Story of Dilution

The law's unravelling has been interpreted as the European Union retreating from its environmental promises. The proposal encountered two major postponements, reportedly over technical problems, which sparked criticism.

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," commented Toussaint.

Originally, the law mandated that firms to trace goods to their specific geographic origin 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 said. "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."

Intense Lobbying

Yet, the rigorous checks provoked opposition in the EU capital from multinational corporations, exporting nations, rightwing parties and EU logging states.

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority more skeptical of green regulations.

"The other pressure came from major export markets like the United States," said expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

The passed law includes several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," lamented Schally. "By shifting responsibilities to producers, it reduced accountability."

Business Frustration

The delays and changes have also created annoyance for businesses that complied early.

"We feel very annoyed because we invested significant resources into complying," said 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

A commission spokesperson supported the final law, saying: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

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