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Widely celebrated as a groundbreaking law that would combat the global crisis of forest loss.

However, the final version of the EU's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has emerged in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"The regulation was hollowed out," said Hugo Schally, citing 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 a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Green party MEP 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 hopes of more than a million EU citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

At its launch 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 is seen by critics as the EU walking back its environmental promises. The proposal encountered significant delays, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the regulation mandated that firms to trace commodities back to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the rigorous checks triggered a backlash in Brussels from large companies, exporting nations, rightwing parties and EU logging states.

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

"Additional intense pressure came from big trading partners like the United States," said corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening rules for companies, it stripped them back," lamented the law's author. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"It is very frustrating because we put a lot of effort 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

An EU representative defended the outcome, saying: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient implementation."

"The revised regulation provides for predictability, which is key for business and competent authorities to successfully implement this vitally important regulation."