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It was a pioneering regulation that would curb the worldwide crisis of deforestation.

But, the final version of the EU's deforestation regulation, once heralded as the flagship policy of the Green Deal, has emerged in a significantly diluted state, prompting criticism from its initial author and green lawmakers.

"The regulation was gutted," stated Hugo Schally, citing the removal of key obligations for downstream traders to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that fewer obligated actors, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental MEP Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of more than a million EU citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest legislation ever put forward to combat deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its green talk. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," commented Toussaint.

Originally, the regulation required companies to track goods to their exact plot of land using geolocation data, 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 said. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

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.

Experts cite last year's European Parliament elections as a decisive moment, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from major export markets outside the EU," said expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law includes key dilutions:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new “low risk” category was introduced.
• 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 downstream obligations, it rolled them back," said the law's author. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... 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, stating: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced implementation."

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