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Originally hailed as a groundbreaking regulation that would curb the global scourge of forest loss.

However, the revised version of the European Union's deforestation regulation, once heralded as the crown jewel of the Green Deal, has emerged in a significantly diluted state, prompting criticism from its initial author and environmental politicians.

"It has been hollowed out," stated Hugo Schally, pointing to the removal of key obligations for downstream traders to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Environmental vice-president a leading green politician was more blunt, describing the delays, loopholes and exemptions – including one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of over 1.2 million European citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

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

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its green talk. The proposal encountered two major postponements, reportedly over IT issues, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the regulation required companies to track commodities back to their specific geographic origin using geolocation data, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"This was not red tape for its own sake," the former official explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

However, the rigorous checks provoked opposition in Brussels from multinational corporations, producer countries, conservative political groups and EU logging states.

Experts cite last year's European Parliament elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure has come from big trading partners like the United States," noted corporate sustainability professor, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

The passed law features several critical weakenings:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category 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.

"Instead of tightening rules for companies, it rolled them back," lamented Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Business Frustration

The delays and changes have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," 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."

The Commission's Stance

An EU representative defended the outcome, stating: "We have listened to concerns and acted to ensure a simple, fair and cost-efficient application."

"The new text ensures stability, which is key for business and national regulators to effectively enforce this vitally important regulation."