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Originally hailed as a pioneering regulation that would combat the global crisis of deforestation.

However, the revised version of the EU's deforestation regulation, once touted as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"The regulation was gutted," stated Hugo Schally, 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.

He warned that fewer obligated actors, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental MEP a leading green politician was more blunt, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This outcome 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 Frans Timmermans trumpeted it as "the toughest legislation proposed to combat deforestation."

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over IT issues, which sparked criticism.

"By revisiting the legislation rather than fixing a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the regulation mandated that firms to trace goods to their specific geographic origin 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," Schally explained. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from large companies, exporting nations, rightwing parties 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.

"Additional intense pressure has come from major export markets outside the EU," said corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A option for more reductions was opened 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," said Schally. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we invested significant resources into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

A commission spokesperson supported the final law, saying: "We have listened to feedback and acted to ensure a pragmatic and balanced application."

"The revised regulation ensures stability, which is crucial for companies and national regulators to successfully implement this very important regulation."