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

But, the revised version of the European Union's deforestation regulation, once heralded as the flagship policy of the Green Deal, has emerged in a significantly diluted state, prompting alarm from its original architect and environmental politicians.

"The regulation was gutted," stated Hugo Schally, pointing to the removal of key obligations for downstream traders to check the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, fewer data points, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental vice-president 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 over 1.2 million EU citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the most ambitious legislation proposed to combat deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. The proposal encountered two major postponements, ostensibly over technical problems, which sparked criticism.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the law required companies to trace goods back to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence provoked opposition in the EU capital from large companies, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, creating a new political majority less favorable toward green regulations.

"The other pressure came from big trading partners outside the EU," said corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

The Weakened Final Text

The passed law features key dilutions:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," lamented the law's author. "Moving obligations 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 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 could be altered again. It’s a major letdown."

The Commission's Stance

A commission spokesperson supported the final law, stating: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient implementation."

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