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It was a landmark regulation that would combat the worldwide scourge of forest loss.

But, the revised version of the EU's deforestation regulation, once heralded as the flagship policy of the Green Deal, has been passed in a significantly diluted state, leading to criticism from its initial author and green lawmakers.

"The regulation was hollowed out," stated Hugo Schally, citing the removal of key obligations for downstream traders to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Green party MEP a leading green politician was more blunt, describing the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the hopes 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, then-Green Deal commissioner the European commissioner called it "the most ambitious legislation ever put forward to fight forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the European Union retreating from its green talk. It faced significant delays, ostensibly over technical problems, which sparked criticism.

"By revisiting the legislation rather than fixing a simple IT problem, authorities invited political interference," commented Toussaint.

In its first draft, the regulation mandated that firms to trace goods to their exact plot of land using geolocation data, making them liable for deforestation in their supply chains with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," the former official said. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

Yet, the rigorous checks provoked opposition in Brussels from multinational corporations, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's EU elections as a turning point, creating a new political majority less favorable toward environmental rules.

"The other pressure has come from big trading partners like the United States," noted corporate sustainability professor, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped them back," said Schally. "By shifting responsibilities to producers, it reduced accountability."

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we put a lot of effort into complying," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

An EU representative defended the outcome, saying: "We have listened to concerns and acted to ensure a pragmatic and balanced implementation."

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