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Originally hailed as a landmark regulation that would combat the worldwide crisis of deforestation.

However, the final version of the EU's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has emerged in a severely weakened state, leading to alarm from its original architect and green lawmakers.

"The regulation was stripped," said Hugo Schally, pointing to the removal of crucial requirements for downstream traders to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This final text stands in stark contrast to the demands of over 1.2 million European citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner called it "the most ambitious legislation ever put forward to combat deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the European Union retreating from its green talk. The proposal encountered significant delays, ostensibly over IT issues, which drew condemnation.

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

In its first draft, the regulation required companies to track commodities back to their exact plot of land using GPS coordinates, holding them accountable for forest loss along their supply lines with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that ensured enforcement, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

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

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

"The other pressure came from big trading partners outside the EU," said expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

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

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort into preparing," stated a coffee company executive. "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 defended the outcome, stating: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient implementation."

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