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It was a pioneering regulation that would combat the worldwide crisis of deforestation.

However, the revised version of the EU's deforestation regulation, previously heralded as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, prompting criticism 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 products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, 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 delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of more than a million European citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious legislation ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its green talk. It faced two major postponements, ostensibly over technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the law required companies to track goods back to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with criminal charges and hefty fines.

"This was not red tape for its own sake," Schally said. "These rules were the tool that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the strict due diligence provoked opposition in the EU capital from large companies, exporting nations, rightwing parties and member states with forestry industries.

Analysts point to 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 outside the EU," said corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation features several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it rolled them back," lamented Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"We feel very annoyed 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 could be altered again. It’s a major letdown."

The Commission's Stance

An EU representative defended the outcome, 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 regulation."