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It was a landmark regulation that would combat the worldwide crisis of deforestation.

However, the revised version of the EU's deforestation regulation, previously heralded as the flagship policy of the Green Deal, has been passed in a significantly diluted state, prompting alarm from its original architect and environmental politicians.

"It has been stripped," stated Hugo Schally, pointing to the exclusion of key obligations for downstream traders to check the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

Political Dismantling

Green party vice-president a leading green politician went further, labeling the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome 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 deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the toughest legislation proposed to combat deforestation."

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 drew condemnation.

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

Originally, the law mandated that firms to trace commodities back to their specific geographic origin using GPS coordinates, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the strict due diligence 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 EU elections as a turning point, shifting the balance of power less favorable toward environmental rules.

"Additional intense pressure came from big trading partners outside the EU," noted corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

The Weakened Final Text

The passed law features several critical weakenings:

• Retailers and traders were largely freed from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," lamented Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Business Frustration

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

"We feel very annoyed because we invested significant resources into complying," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

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

"The revised regulation provides for predictability, which is crucial for companies and national regulators to successfully implement this vitally important regulation."