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Originally hailed as a groundbreaking law that would curb the worldwide scourge of forest loss.

However, the final version of the EU's deforestation regulation, once touted as the flagship policy of the Green Deal, has been passed in a severely weakened state, leading to alarm from its initial author and environmental politicians.

"The regulation was hollowed out," said the law's original author, citing the exclusion of key obligations for downstream traders to check the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – such as one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the hopes of over 1.2 million EU citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the most ambitious legislation ever put forward to fight deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the law mandated that firms to track goods back to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks provoked opposition in Brussels from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Experts cite last year's European Parliament elections as a decisive moment, shifting the balance of power 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 mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," said Schally. "Moving obligations upstream, it lessened the number of responsible firms."

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 preparing," stated a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

An EU representative defended the outcome, saying: "We have listened to feedback and taken action to ensure a pragmatic and balanced application."

"The revised regulation ensures stability, which is key for business and national regulators to successfully implement this very important regulation."