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Originally hailed as a landmark law that would help stop the global crisis of deforestation.

But, the final version of the EU's deforestation regulation, once heralded as the crown jewel of the Green Deal, has emerged in a significantly diluted state, leading to criticism from its original architect and environmental politicians.

"The regulation was stripped," said the law's original author, 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, less information collected, and less precise origin data would complicate the task of authorities.

Political Dismantling

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

This final text is a far cry from the demands of over 1.2 million EU citizens who supported an initiative in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans called it "the most ambitious legislation proposed to combat deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. It faced significant delays, reportedly over IT issues, which sparked criticism.

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

Originally, the law required companies to trace goods back to their exact plot of land using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," Schally explained. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from large companies, exporting nations, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a turning point, creating a new political majority less favorable toward environmental rules.

"The other pressure has come from major export markets outside the EU," noted corporate sustainability professor, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features key dilutions:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was created.
• A option for more reductions was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," lamented Schally. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources 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."

Official Defense

An EU representative defended the outcome, stating: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient application."

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