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Widely celebrated as a landmark piece of legislation that would curb the global crisis of forest loss.

However, the revised version of the EU's deforestation regulation, previously touted as the flagship policy of the Green Deal, has emerged in a severely weakened state, prompting alarm from its original architect and environmental politicians.

"The regulation was hollowed out," said Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to verify the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

Political Dismantling

Environmental MEP Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the demands of more than a million EU citizens who signed a petition in 2020 demanding a ban on goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner Frans Timmermans called it "the toughest legislation ever put forward to fight forest loss."

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, ostensibly over technical problems, which sparked criticism.

"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 exact plot of land 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 prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"The other pressure has come from major export markets like the United States," noted corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was established 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," said the law's author. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

"We feel very annoyed 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 major letdown."

The Commission's Stance

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

"The new text provides for predictability, which is key for business and national regulators to successfully implement this vitally important regulation."