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Widely celebrated as a landmark law that would curb the global scourge of deforestation.

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

"The regulation was gutted," said the law's original author, citing the exclusion of key obligations for later-stage companies to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "systematic weakening" of the law.

This outcome is a far cry from the hopes of over 1.2 million European citizens who signed a petition in 2020 demanding a prohibition of deforestation-linked products.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the most ambitious legislation proposed to combat forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its green talk. It faced significant delays, reportedly over technical problems, which drew condemnation.

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

In its first draft, the law mandated that firms to trace commodities back to their specific geographic origin using GPS coordinates, holding them accountable for forest loss along their supply lines with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," the former official explained. "These rules were the tool 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 Brussels from multinational corporations, producer countries, conservative political groups and EU logging states.

Analysts point to last year's EU elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

"Additional intense pressure has come from big trading partners outside the EU," noted corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was established 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 stripped them back," said Schally. "Moving obligations to producers, it reduced accountability."

Business Frustration

The delays and changes have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation provides for predictability, which is crucial for companies and competent authorities to successfully implement this vitally important law."