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Originally hailed as a pioneering law that would help stop the worldwide scourge of deforestation.

But, the final version of the European Union's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has been passed in a severely weakened state, leading to criticism from its original architect and green lawmakers.

"It has been hollowed out," stated Hugo Schally, citing the removal of crucial requirements for later-stage companies to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Green party MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million European citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious law ever put forward to combat deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. It faced two major postponements, reportedly over technical problems, which sparked criticism.

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

Originally, the law mandated that firms to track commodities to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

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

Experts cite last year's European Parliament elections as a turning point, creating a new political majority less favorable toward green regulations.

"Additional intense pressure has come from big trading partners like the United States," said expert Andreas Rasche, suggesting 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 – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening rules for companies, it stripped them back," said Schally. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions 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 purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

A commission spokesperson supported the final law, saying: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is crucial for companies and national regulators to effectively enforce this vitally important law."