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It was a groundbreaking piece of legislation that would curb the worldwide scourge of forest loss.

But, the final version of the European Union's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has been passed in a severely weakened state, prompting alarm from its original architect and green lawmakers.

"The regulation was gutted," stated Hugo Schally, citing the removal of crucial requirements for downstream traders to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental MEP a leading green politician went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the demands of more than a million EU citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner called it "the most ambitious law ever put forward to combat forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its environmental promises. It faced significant delays, reportedly over IT issues, which drew condemnation.

"By reopening this file rather than fixing a simple IT problem, authorities invited political interference," commented Toussaint.

In its first draft, the regulation required companies to track goods to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Intense Lobbying

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

Analysts point to last year's EU elections as a turning point, creating a new political majority more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it stripped them back," lamented the law's author. "Moving obligations to producers, it reduced accountability."

Business Frustration

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort 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."

Official Defense

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

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