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Widely celebrated as a pioneering regulation that would combat the global crisis of deforestation.

But, the revised version of the EU's deforestation regulation, previously heralded as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, prompting criticism from its initial author and environmental politicians.

"It has been hollowed out," said Hugo Schally, citing the removal of key obligations for downstream traders to check the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental MEP Marie Toussaint went further, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This final text is a far cry from the demands of more than a million European citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans called it "the toughest law ever put forward to fight deforestation."

From Ambition to Compromise

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

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

Originally, the regulation mandated that firms to track goods back to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains with criminal charges 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 prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from multinational corporations, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's EU elections as a turning point, creating a new political majority more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," noted expert Andreas Rasche, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Retailers and traders 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 – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," said the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Business Frustration

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," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

An EU representative supported the final law, saying: "The commission has responded to feedback and acted to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is crucial for companies and national regulators to effectively enforce this very important law."