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It was a pioneering regulation that would help stop the global scourge of deforestation.

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

"It has been gutted," said Hugo Schally, pointing to the removal of crucial requirements for later-stage companies to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would complicate the task of authorities.

Political Dismantling

Environmental vice-president Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million EU citizens who supported an initiative in 2020 calling for a ban on goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the toughest law proposed to fight forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over technical problems, which drew condemnation.

"By reopening this file instead of solving a technical issue, authorities invited political interference," remarked the Green MEP.

In its first draft, the law mandated that firms to track commodities to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with penalties and large financial penalties.

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

Mounting Pressure

However, the strict due diligence provoked opposition in Brussels from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a turning point, shifting the balance of power less favorable toward environmental rules.

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

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was introduced.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

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

"It is very frustrating because we invested significant resources into complying," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

A commission spokesperson supported the final law, stating: "We have listened to feedback and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation provides for predictability, which is key for business and competent authorities to successfully implement this very important regulation."