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Widely celebrated as a landmark law that would help stop the global scourge of deforestation.

However, the final version of the EU's deforestation regulation, once touted as the crown jewel of the Green Deal, has emerged in a significantly diluted state, prompting criticism from its original architect and green lawmakers.

"It has been hollowed out," said the law's original author, pointing to the exclusion of key obligations for downstream traders to verify the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, fewer data points, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

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

This final text stands in stark contrast to the hopes of over 1.2 million EU citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans called it "the toughest law proposed to fight deforestation."

From Ambition to Compromise

The law's unravelling has been interpreted as the European Union retreating from its environmental promises. The proposal encountered two major postponements, ostensibly over IT issues, which drew condemnation.

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

In its first draft, the law mandated that firms to trace goods to their specific geographic origin using GPS coordinates, holding them accountable for forest loss along their supply lines with criminal charges and large financial penalties.

"This was not red tape for its own sake," the former official said. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in Brussels from large companies, producer countries, conservative political groups 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 came from major export markets outside the EU," said expert Andreas Rasche, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

The passed law features key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening rules for companies, it rolled them back," said Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort into preparing," said Xavier Rombouts. "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

A commission spokesperson defended the outcome, stating: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

"The new text provides for predictability, which is crucial for companies and national regulators to effectively enforce this vitally important law."