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Widely celebrated as a pioneering law that would combat the global scourge of deforestation.

However, the revised version of the EU's deforestation regulation, once heralded as the flagship policy of the Green Deal, has emerged in a severely weakened state, leading to alarm from its initial author and green lawmakers.

"The regulation was hollowed out," said the law's original author, pointing to the exclusion of key obligations for later-stage companies to check the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

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

This outcome stands in stark contrast to the hopes of over 1.2 million European citizens who signed a petition in 2020 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest law ever put forward to fight deforestation."

A Story of Dilution

The law's unravelling is seen by critics as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a technical issue, authorities invited political interference," commented Toussaint.

In its first draft, the law mandated that firms to track commodities back to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains with penalties and hefty fines.

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

Intense Lobbying

However, the strict due diligence provoked opposition in the EU capital from multinational corporations, exporting nations, conservative political groups and member states with forestry industries.

Experts cite last year's EU elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure has come from big trading partners like the United States," said corporate sustainability professor, suggesting the commission gave in to some requests during negotiations.

The Weakened Final Text

The passed law includes 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 established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it rolled them back," said Schally. "By shifting responsibilities upstream, it reduced accountability."

Business Frustration

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

"It is very frustrating because we invested significant resources into complying," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

Official Defense

An EU representative supported the final law, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient implementation."

"The revised regulation provides for predictability, which is key for business and national regulators to effectively enforce this very important law."