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Originally hailed as a pioneering law that would combat the global crisis of forest loss.

But, the final version of the EU's deforestation regulation, once touted as the flagship policy of the Green Deal, has emerged in a significantly diluted state, leading to alarm from its initial author and green lawmakers.

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

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, describing 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 hopes of more than a million European citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

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

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its green talk. It faced significant delays, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a technical issue, the commission opened Pandora’s box," remarked Toussaint.

Originally, the law mandated that firms to trace goods to their specific geographic origin using GPS coordinates, holding them accountable for deforestation in their supply chains with criminal charges and hefty fines.

"This was not red tape for its own sake," Schally explained. "These rules were the tool 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 large companies, producer countries, rightwing parties and EU logging states.

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

"The other pressure came from major export markets outside the EU," said corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening rules for companies, it stripped them back," lamented the law's author. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"It is very frustrating because we invested significant resources into preparing," said 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."

The Commission's Stance

A commission spokesperson supported the final law, saying: "We have listened to feedback and acted to ensure a pragmatic and balanced implementation."

"The new text ensures stability, which is crucial for companies and national regulators to effectively enforce this vitally important law."