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Widely celebrated as a groundbreaking regulation that would combat the global crisis of deforestation.

But, the revised version of the EU's deforestation regulation, once touted as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, leading to alarm from its initial author and environmental politicians.

"It has been stripped," said the law's original author, citing the removal of key obligations for later-stage companies to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

Political Dismantling

Environmental MEP Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – such as one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands of over 1.2 million EU citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief the European commissioner called it "the toughest legislation ever put forward to fight deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its green talk. It faced two major postponements, ostensibly 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 mandated that firms to track commodities to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

However, the strict due diligence provoked opposition in Brussels from large companies, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to 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 major export markets outside the EU," noted expert Andreas Rasche, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening rules for companies, it stripped them back," lamented the law's author. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort into complying," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

Official Defense

An EU representative supported the final law, stating: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced application."

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