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It was a landmark regulation that would help stop the worldwide crisis of deforestation.

However, the final version of the EU's deforestation regulation, once heralded as the crown jewel of the Green Deal, has emerged in a significantly diluted state, prompting criticism from its initial author and green lawmakers.

"It has been stripped," said the law's original author, pointing to the exclusion of crucial requirements for later-stage companies to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Green party MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the hopes of more than a million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner called it "the toughest law ever put forward to combat deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. It faced significant delays, ostensibly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," commented Toussaint.

Originally, the regulation mandated that firms to track commodities to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," the former official said. "It was the mechanism that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

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

"Additional intense pressure has come from major export markets outside the EU," noted corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation includes several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening rules for companies, it stripped them back," said Schally. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into complying," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative defended the outcome, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient application."

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