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It was a groundbreaking regulation that would curb the global scourge of deforestation.

But, the final version of the European Union's deforestation regulation, once heralded as the flagship policy of the Green Deal, has been passed in a significantly diluted state, prompting alarm from its original architect and green lawmakers.

"The regulation was stripped," said the law's original author, citing the removal of key obligations for later-stage companies to verify the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned 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 was more blunt, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of over 1.2 million EU citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner the European commissioner called it "the toughest legislation ever put forward to combat deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its environmental promises. It faced significant delays, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," remarked the Green MEP.

In its first draft, the regulation required companies to trace goods back to their exact plot of land using geolocation data, holding them accountable for forest loss along their supply lines 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 prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

However, the strict due diligence triggered a backlash in the EU capital from large companies, exporting nations, conservative political groups 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 environmental rules.

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

The Weakened Final Text

In the final legislation features key dilutions:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening rules for companies, it stripped them back," said Schally. "By shifting responsibilities to producers, it reduced accountability."

Business Frustration

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

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

The Commission's Stance

A commission spokesperson defended the outcome, stating: "We have listened to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

"The new text provides for predictability, which is key for business and national regulators to effectively enforce this vitally important law."