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It was a pioneering law that would combat the worldwide scourge of deforestation.

However, the final version of the EU's deforestation regulation, previously touted as the crown jewel of the Green Deal, has emerged in a severely weakened state, prompting alarm from its initial author and green lawmakers.

"It has been hollowed out," stated Hugo Schally, citing the removal of key obligations for downstream traders to verify the provenance 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 MEP a leading green politician was more blunt, labeling the delays, loopholes and exemptions – including one for printed products – 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 supported an initiative in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the most ambitious legislation ever put forward to fight forest loss."

From Ambition to Compromise

The law's unravelling has been interpreted as the European Union retreating from its green talk. The proposal encountered two major postponements, ostensibly over IT issues, which sparked criticism.

"By reopening this file instead of solving a technical issue, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the regulation mandated that firms to trace goods to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"This was not red tape for its own sake," the former official explained. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities 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, shifting the balance of power more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it stripped them back," lamented the law's author. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

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

Official Defense

An EU representative defended the outcome, stating: "We have listened to feedback and acted to ensure a pragmatic and balanced application."

"The new text provides for predictability, which is key for business and competent authorities to effectively enforce this very important regulation."