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It was a groundbreaking law that would combat the worldwide scourge of deforestation.

But, the revised version of the EU's deforestation regulation, previously touted as the flagship policy of the Green Deal, has been passed in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"It has been gutted," said the law's original author, citing the removal of key obligations for later-stage companies to check the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would make enforcement and prosecution more difficult.

A Watered-Down Law

Environmental MEP a leading green politician went further, labeling the delays, loopholes and exemptions – including one for printed products – as the "systematic weakening" of the law.

This final text stands in stark contrast to the hopes of more than a million EU 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 called it "the toughest legislation proposed to combat deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over technical problems, which drew condemnation.

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

In its first draft, the law mandated that firms to trace commodities to their exact plot of land using GPS coordinates, holding them accountable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from large companies, producer countries, conservative political groups and member states with forestry industries.

Experts cite last year's European Parliament elections as a turning point, creating a new political majority less favorable toward green regulations.

"The other pressure came from major export markets outside the EU," noted expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law features several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," said Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

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 invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

A commission spokesperson defended the outcome, saying: "We have listened to concerns and taken action to ensure a pragmatic and balanced application."

"The new text provides for predictability, which is key for business and competent authorities to successfully implement this vitally important regulation."