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Widely celebrated as a landmark law that would help stop the worldwide crisis of forest loss.

However, the final version of the European Union's deforestation regulation, previously heralded as the crown jewel of the Green Deal, has emerged in a severely weakened state, leading to alarm from its original architect and environmental politicians.

"The regulation was stripped," stated Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to verify the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Environmental MEP a leading green politician was more blunt, describing the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of more than a million European citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the most ambitious law ever put forward to fight forest loss."

A Story of Dilution

The law's unravelling is seen by critics as the European Union retreating from its environmental promises. The proposal encountered significant delays, reportedly over technical problems, which drew condemnation.

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

In its first draft, the regulation required companies to trace goods to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with penalties and hefty fines.

"This was not red tape for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, 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 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 came from big trading partners outside the EU," noted corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation features key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

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

Uncertainty for Companies

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 Xavier Rombouts. "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 defended the outcome, saying: "The commission has responded to feedback and taken action to ensure a pragmatic and balanced implementation."

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