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It was a landmark piece of legislation that would curb the global crisis of deforestation.

But, the final version of the EU's deforestation regulation, once touted as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, prompting criticism from its original architect and green lawmakers.

"The regulation was hollowed out," stated the law's original author, pointing to the removal of crucial requirements for later-stage companies to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Green party vice-president Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – including one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of more than a million European citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the toughest legislation proposed to combat forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its environmental promises. It faced significant delays, ostensibly over technical problems, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, authorities invited political interference," commented Toussaint.

Originally, the regulation required companies to track goods to their exact plot of land using GPS coordinates, holding them accountable for deforestation in their supply chains 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, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the rigorous checks provoked opposition in Brussels from large companies, exporting nations, conservative political groups and EU logging states.

Analysts point to last year's European Parliament elections as a turning point, shifting the balance of power more skeptical of green regulations.

"The other pressure came from big trading partners outside the EU," noted corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it stripped them back," said Schally. "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 preparing," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

Official Defense

An EU representative defended the outcome, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient application."

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