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It was a groundbreaking regulation that would help stop the worldwide scourge of deforestation.

However, the revised version of the EU's deforestation regulation, once heralded as the crown jewel of the Green Deal, has been passed in a significantly diluted state, prompting alarm from its initial author and environmental politicians.

"It has been stripped," said Hugo Schally, pointing to the removal of key obligations for later-stage companies to check the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Green party vice-president Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the hopes of over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the most ambitious law ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced two major postponements, reportedly over IT issues, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, authorities invited political interference," remarked Toussaint.

Originally, the law required companies to trace goods to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"This was not red tape for its own sake," Schally explained. "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 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, creating a new political majority more skeptical of green regulations.

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

Key Loopholes Introduced

In the final legislation features 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 a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped 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 businesses that complied early.

"It is very frustrating because we invested significant resources into preparing," stated 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 major letdown."

The Commission's Stance

An EU representative supported the final law, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced implementation."

"The revised regulation provides for predictability, which is crucial for companies and competent authorities to effectively enforce this vitally important law."