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Widely celebrated as a groundbreaking regulation that would curb the global scourge of forest loss.

But, the revised version of the European Union's deforestation regulation, previously heralded as the crown jewel of the European Green Deal, has emerged in a severely weakened state, prompting alarm from its initial author and environmental politicians.

"It has been stripped," said Hugo Schally, pointing to the removal of key obligations for downstream traders to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – such as 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 European citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious legislation ever put forward to fight forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced two major postponements, ostensibly over technical problems, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, authorities invited political interference," commented Toussaint.

Originally, the regulation required companies to trace goods back to their specific geographic origin using geolocation data, making them liable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from multinational corporations, exporting nations, rightwing parties and member states with forestry industries.

Experts cite last year's European Parliament elections as a turning point, creating a new political majority less favorable toward green regulations.

"The other pressure came from big trading partners outside the EU," noted corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," said the law's author. "Moving obligations to producers, it reduced accountability."

Business Frustration

The delays and changes have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and acted to ensure a pragmatic and balanced application."

"The new text ensures stability, which is crucial for companies and competent authorities to effectively enforce this vitally important regulation."