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It was a groundbreaking piece of legislation that would combat the worldwide scourge of forest loss.

But, the revised version of the European Union's deforestation regulation, once touted as the flagship policy of the European Green Deal, has been passed in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"It has been hollowed out," said Hugo Schally, pointing to the removal of key obligations for later-stage companies to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would complicate the task of authorities.

Political Dismantling

Green party vice-president a leading green politician was more blunt, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest law ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its environmental promises. The proposal encountered significant delays, ostensibly over technical problems, which sparked criticism.

"By reopening this file instead of solving a technical issue, authorities invited political interference," remarked the Green MEP.

Originally, the law required companies to trace goods to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains 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 prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence provoked opposition in Brussels from multinational corporations, producer countries, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, creating a new political majority less favorable toward environmental rules.

"Additional intense pressure came from major export markets outside the EU," noted corporate sustainability professor, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

The passed law includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said Schally. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also created annoyance for companies that prepared in advance.

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

The Commission's Stance

An EU representative supported the final law, stating: "We have listened to concerns and taken action to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is key for business and competent authorities to effectively enforce this vitally important law."