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Widely celebrated as a landmark regulation that would curb the worldwide crisis of forest loss.

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

"It has been hollowed out," said Hugo Schally, pointing to the exclusion of crucial requirements for downstream traders to verify the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Environmental vice-president Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million European citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation ever put forward to fight deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its environmental promises. It faced significant delays, reportedly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," commented Toussaint.

Originally, the regulation mandated that firms to trace commodities to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "These rules were the tool that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

Yet, the rigorous checks triggered a backlash in Brussels 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, creating a new political majority less favorable toward green regulations.

"The other pressure has come from major export markets outside the EU," said expert Andreas Rasche, suggesting the commission gave in to some demands in trade talks.

The Weakened Final Text

In the final legislation features key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said the law's author. "Moving obligations upstream, it reduced accountability."

Business Frustration

The delays and changes have also caused frustration for businesses that complied early.

"It is very frustrating because we put a lot of effort into complying," 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 big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "We have listened to concerns and taken action to ensure a simple, fair and cost-efficient application."

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