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Widely celebrated as a groundbreaking law that would curb the worldwide scourge of deforestation.

But, the final version of the EU's deforestation regulation, previously touted as the crown jewel of the European Green Deal, has emerged in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"It has been gutted," stated Hugo Schally, pointing to the exclusion of crucial requirements for later-stage companies to check the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental vice-president a leading green politician went further, labeling the postponements, exceptions and new loopholes – including one for paper goods – 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, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious law proposed to fight deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its green talk. The proposal encountered significant delays, 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.

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

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

However, the rigorous checks provoked opposition in the EU capital from large companies, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

"The other pressure came from big trading partners outside the EU," noted expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• 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 rules for companies, it rolled them back," lamented Schally. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we invested significant resources into complying," said Xavier Rombouts. "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 defended the outcome, saying: "The commission has responded to feedback and taken action to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is key for business and national regulators to effectively enforce this very important law."