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It was a groundbreaking piece of legislation that would curb the worldwide crisis of forest loss.

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

"It has been hollowed out," stated Hugo Schally, pointing to the exclusion of crucial requirements for later-stage companies to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Green party vice-president Marie Toussaint went further, labeling the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the most ambitious legislation proposed to fight forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its green talk. The proposal encountered significant delays, reportedly over technical problems, which sparked criticism.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the law mandated that firms to track commodities back to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, 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, rightwing parties and member states with forestry industries.

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

"Additional intense pressure came from major export markets like the United States," noted expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation features key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new “low risk” category was created.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"It is very frustrating because we invested significant resources into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

Official Defense

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is crucial for companies and competent authorities to effectively enforce this very important regulation."