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It was a groundbreaking piece of legislation that would help stop the global crisis of deforestation.

However, the revised version of the European Union's deforestation regulation, previously heralded as the crown jewel of the European Green Deal, has been passed in a severely weakened state, prompting alarm from its original architect and green lawmakers.

"The regulation was hollowed out," said the law's original author, pointing to the removal of key obligations for later-stage companies to verify the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

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

This final text is a far cry from the hopes of more than a 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 called it "the most ambitious law ever put forward to fight forest loss."

From Ambition to Compromise

The law's unravelling has been interpreted as the European Union retreating from its environmental promises. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a technical issue, the commission opened Pandora’s box," commented the Green MEP.

Originally, the law mandated that firms to trace goods back to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, producer countries, rightwing parties and EU logging states.

Analysts point to last year's EU elections as a turning point, shifting the balance of power more skeptical of environmental rules.

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

Key Loopholes Introduced

The passed law includes several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening rules for companies, it stripped them back," lamented the law's author. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into complying," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

Official Defense

A commission spokesperson defended the outcome, stating: "We have listened to feedback and taken action to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is key for business and national regulators to successfully implement this vitally important regulation."