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Widely celebrated as a groundbreaking piece of legislation that would help stop the worldwide crisis of forest loss.

However, the revised version of the European Union's deforestation regulation, previously heralded as the flagship policy of the Green Deal, has emerged in a severely weakened state, prompting criticism from its initial author and green lawmakers.

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

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Environmental MEP a leading green politician went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of more than a million EU citizens who supported an initiative in 2020 demanding a prohibition of goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner trumpeted it as "the most ambitious law proposed to fight deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its environmental promises. It faced significant delays, reportedly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a simple IT problem, authorities invited political interference," commented the Green MEP.

Originally, the regulation required companies to trace goods to their specific geographic origin using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," Schally explained. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

However, the rigorous checks provoked opposition in the EU capital from multinational corporations, producer countries, rightwing parties and member states with forestry industries.

Experts cite last year's EU elections as a turning point, creating a new political majority less favorable toward green regulations.

"The other pressure has come from major export markets like the United States," noted expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes several critical weakenings:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was created.
• A option for more reductions was established 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 the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we put a lot of effort into complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

An EU representative defended the outcome, stating: "The commission has responded to concerns and taken action to ensure a simple, fair and cost-efficient implementation."

"The revised regulation provides for predictability, which is key for business and national regulators to effectively enforce this very important regulation."