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Widely celebrated as a landmark regulation that would help stop the global crisis of deforestation.

But, the final version of the EU's deforestation regulation, once heralded as the flagship policy of the Green Deal, has emerged in a severely weakened state, leading to 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 check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that fewer obligated actors, fewer data points, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 calling for a ban on goods linked to forest destruction.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious law ever put forward to combat forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," commented Toussaint.

In its first draft, the regulation mandated that firms to track goods to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains with penalties and large financial penalties.

"This was not red tape for its own sake," the former official said. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in the EU capital from multinational corporations, exporting nations, rightwing parties and member states with forestry industries.

Experts cite last year's European Parliament elections as a decisive moment, creating a new political majority more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," said expert Andreas Rasche, implying the commission gave in to some requests during negotiations.

The Weakened Final Text

In the final legislation 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 four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

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

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

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

The Commission's Stance

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

"The new text provides for predictability, which is crucial for companies and national regulators to effectively enforce this very important law."