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Widely celebrated as a landmark regulation that would help stop the global crisis of forest loss.

But, the final version of the EU's deforestation regulation, previously heralded as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its initial author and environmental politicians.

"It has been stripped," stated the law's original author, pointing to the exclusion of key obligations for later-stage companies to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would complicate the task of authorities.

Political Dismantling

Environmental MEP Marie Toussaint went further, describing the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This final text stands in stark contrast to the demands of more than a million EU citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans called it "the most ambitious law ever put forward to fight deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its environmental promises. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

Originally, the law mandated that firms to trace goods to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the strict due diligence provoked opposition in the EU capital from multinational corporations, producer countries, conservative political groups and EU logging states.

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

"Additional intense pressure has come from major export markets like the United States," noted corporate sustainability professor, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

In the final legislation features key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it rolled them back," lamented the law's author. "Moving obligations to producers, it reduced accountability."

Business Frustration

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

"It is very frustrating because we invested significant resources into complying," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

An EU representative 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 effectively enforce this vitally important law."