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Widely celebrated as a pioneering law that would help stop the worldwide crisis of deforestation.

However, the revised version of the European Union's deforestation regulation, once touted as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its original architect and green lawmakers.

"It has been hollowed out," said the law's original author, citing the exclusion of key obligations for downstream traders to verify the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

Political Dismantling

Environmental vice-president Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the hopes of more than a million European citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner 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 European Union retreating from its green talk. It faced two major postponements, ostensibly over technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a technical issue, the commission opened Pandora’s box," commented Toussaint.

Originally, the regulation required companies to track commodities to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with penalties and hefty fines.

"This was not red tape for its own sake," the former official explained. "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

However, the rigorous checks triggered a backlash in Brussels from large companies, producer countries, conservative political groups and EU logging states.

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

"Additional intense pressure came from big trading partners like the United States," noted corporate sustainability professor, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented Schally. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into preparing," 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."

The Commission's Stance

A commission spokesperson defended the outcome, saying: "We have listened to concerns and taken action to ensure a pragmatic and balanced application."

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