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It was a landmark regulation that would help stop the worldwide crisis of forest loss.

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

"It has been stripped," said Hugo Schally, citing the exclusion of crucial requirements for later-stage companies to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would hinder monitoring and legal action.

Political Dismantling

Environmental MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the hopes of more than a million European citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner Frans Timmermans called it "the toughest legislation proposed to fight forest loss."

A Story of Dilution

The law's unravelling is seen by critics as the EU walking back its green talk. It faced significant delays, ostensibly over IT issues, which sparked criticism.

"By reopening this file instead of solving a technical issue, the commission opened Pandora’s box," commented Toussaint.

In its first draft, the regulation required companies to track goods to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with criminal charges and large financial penalties.

"This was not red tape for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, 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 green regulations.

"Additional intense pressure came from major export markets outside the EU," said expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," lamented the law's author. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

The delays and changes have also created annoyance for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

A commission spokesperson supported the final law, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is key for business and national regulators to effectively enforce this vitally important law."