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It was a pioneering law that would help stop the worldwide scourge of forest loss.

But, the final version of the EU's deforestation regulation, previously touted as the flagship policy of the Green Deal, has emerged in a significantly diluted state, leading to alarm from its initial author and environmental politicians.

"It has been gutted," stated the law's original author, pointing to the removal of key obligations for downstream traders to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Green party MEP Marie Toussaint was more blunt, describing the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This outcome is a far cry from the demands of more than a million European citizens who supported an initiative in 2020 demanding a ban on goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the toughest law proposed to combat forest loss."

From Ambition to Compromise

The regulation's dilution has been interpreted as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over technical problems, which sparked criticism.

"By revisiting the legislation rather than fixing a technical issue, authorities invited political interference," remarked Toussaint.

Originally, the law mandated that firms to track goods back to their exact plot of land using GPS coordinates, 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 explained. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in Brussels from large companies, exporting nations, rightwing parties and EU logging states.

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

"The other pressure has come from major export markets outside the EU," noted expert Andreas Rasche, implying the EU yielded to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," lamented Schally. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for businesses that complied early.

"It is very frustrating because we put a lot of effort into complying," 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."

Official Defense

A commission spokesperson supported the final law, stating: "We have listened to feedback and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation ensures stability, which is key for business and competent authorities to successfully implement this vitally important law."