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Originally hailed as a pioneering piece of legislation that would combat the worldwide scourge of deforestation.

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

"The regulation was hollowed out," stated the law's original author, citing the removal of crucial requirements for downstream traders to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that fewer obligated actors, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Green party vice-president Marie Toussaint went further, labeling the delays, loopholes and exemptions – including one for paper goods – as the "political dismantling" of the law.

This final text 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.

When launched in 2021, then-Green Deal commissioner the European commissioner called it "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 environmental promises. It faced two major postponements, 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 regulation required companies to trace commodities back to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"This was not red tape for its own sake," Schally said. "These rules were the tool that made the rules enforceable, established traceability, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority less favorable toward environmental rules.

"Additional intense pressure has come from major export markets like the United States," noted corporate sustainability professor, implying the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation includes key dilutions:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – 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 protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

Official Defense

An EU representative defended the outcome, saying: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced implementation."

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