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It was a landmark law that would combat the global crisis of deforestation.

But, the final version of the EU's deforestation regulation, previously heralded as the flagship policy of the European Green Deal, has emerged in a severely weakened state, leading to criticism from its original architect and environmental politicians.

"It has been gutted," stated the law's original author, pointing to the removal of key obligations for downstream traders to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Green party vice-president Marie Toussaint was more blunt, describing the postponements, exceptions and new loopholes – such as 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 signed a petition 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 toughest legislation proposed to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its green talk. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

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

Originally, 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 penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

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

"Additional intense pressure has come from big trading partners like the United States," noted expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was created.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening rules for companies, it rolled them back," lamented the law's author. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for businesses that complied early.

"We feel very annoyed because we put a lot of effort into preparing," stated 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 major letdown."

The Commission's Stance

An EU representative supported the final law, saying: "We have listened to feedback and taken action to ensure a pragmatic and balanced application."

"The new text ensures stability, which is crucial for companies and national regulators to successfully implement this very important law."