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It was a landmark piece of legislation that would curb the worldwide scourge of forest loss.

But, the revised version of the European Union's deforestation regulation, once heralded as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, leading to alarm from its original architect and environmental politicians.

"The regulation was gutted," stated the law's original author, pointing to the removal of key obligations for downstream traders to verify the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party vice-president Marie Toussaint was more blunt, labeling the delays, loopholes and exemptions – 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 prohibition of deforestation-linked products.

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

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its environmental promises. The proposal encountered significant delays, ostensibly over IT issues, which sparked criticism.

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," commented Toussaint.

In its first draft, the law required companies to trace commodities to their exact plot of land using GPS coordinates, making them liable for deforestation in their supply chains 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 ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

However, the rigorous checks triggered a backlash in Brussels from large companies, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament 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, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Downstream operators were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening downstream obligations, it rolled them back," said Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"It is very frustrating because we invested significant resources into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

The Commission's Stance

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

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