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It was a landmark law that would curb the worldwide crisis of deforestation.

But, the revised version of the European Union's deforestation regulation, once heralded as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its original architect and green lawmakers.

"The regulation was hollowed out," stated Hugo Schally, pointing to the exclusion of key obligations for downstream traders to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Green party MEP a leading green politician was more blunt, labeling the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands of more than a million European citizens who signed a petition in 2020 demanding 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 proposed to combat deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. The proposal encountered two major postponements, reportedly over technical problems, which drew condemnation.

"By reopening this file instead of solving a technical issue, the commission opened Pandora’s box," commented the Green MEP.

Originally, the law required companies to trace commodities to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with criminal charges and hefty fines.

"This was not red tape for its own sake," the former official explained. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the rigorous checks provoked opposition in Brussels from multinational corporations, producer countries, rightwing parties and EU logging states.

Analysts point to last year's European Parliament elections as a turning point, shifting the balance of power more skeptical of environmental rules.

"Additional intense pressure came from big trading partners like the United States," said expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

The Weakened Final Text

The passed law includes several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening rules for companies, it stripped them back," lamented the law's author. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

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

"It is very frustrating because we invested significant resources 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 feedback and taken action to ensure a simple, fair and cost-efficient application."

"The new text ensures stability, which is key for business and competent authorities to effectively enforce this vitally important regulation."