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It was a pioneering regulation that would combat the global scourge of deforestation.

But, the final version of the European Union's deforestation regulation, previously touted as the crown jewel of the Green Deal, has been passed in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"The regulation was gutted," 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.

He warned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Green party vice-president a leading green politician went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the demands of more than a million European citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the most ambitious law ever put forward to combat deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its environmental promises. The proposal encountered two major postponements, reportedly over IT issues, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the regulation mandated that firms to trace goods to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in the EU capital from large companies, exporting nations, rightwing parties and EU logging states.

Analysts point to last year's EU elections as a decisive moment, creating a new political majority more skeptical of environmental rules.

"Additional intense pressure came from major export markets outside the EU," said corporate sustainability professor, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law includes key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was introduced.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it rolled them back," lamented Schally. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we put a lot of effort into complying," 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."

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 application."

"The new text ensures stability, which is key for business and competent authorities to successfully implement this vitally important regulation."