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Originally hailed as a landmark piece of legislation that would curb the global scourge of forest loss.

However, the revised version of the European Union's deforestation regulation, previously touted as the crown jewel of the Green Deal, has emerged in a severely weakened state, leading to criticism from its original architect and green lawmakers.

"It has been gutted," said Hugo Schally, pointing to the exclusion of crucial requirements for downstream traders to check the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Green party vice-president Marie Toussaint 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 over 1.2 million European citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation proposed to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its environmental promises. It faced two major postponements, ostensibly over IT issues, which sparked criticism.

"By revisiting the legislation rather than fixing a technical issue, authorities invited political interference," commented the Green MEP.

In its first draft, the regulation required companies to trace commodities back to their exact plot of land using geolocation data, 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. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

However, the rigorous checks triggered a backlash in the EU capital from large companies, exporting nations, rightwing parties and EU logging states.

Experts cite last year's European Parliament elections as a turning point, creating a new political majority more skeptical of green regulations.

"Additional intense pressure came from big trading partners outside the EU," said corporate sustainability professor, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," lamented Schally. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"It is very frustrating because we invested significant resources into complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, saying: "We have listened to concerns and taken action to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is crucial for companies and national regulators to successfully implement this vitally important law."