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It was a pioneering regulation that would combat the worldwide crisis of deforestation.

But, the revised version of the European Union's deforestation regulation, previously touted as the flagship policy of the European Green Deal, has been passed in a significantly diluted state, leading to criticism from its initial author and environmental politicians.

"It has been gutted," stated Hugo Schally, pointing to the removal of crucial requirements for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

He warned that fewer obligated actors, less information collected, and less precise origin data would hinder monitoring and legal action.

Political Dismantling

Green party vice-president a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the hopes of more than a million European citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans called it "the toughest legislation ever put forward to combat forest loss."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its green talk. It faced significant delays, reportedly over technical problems, which sparked criticism.

"By revisiting the legislation rather than fixing a simple IT problem, the commission opened Pandora’s box," commented the Green MEP.

In its first draft, the law mandated that firms to trace commodities back 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 said. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

Yet, the rigorous checks triggered a backlash in Brussels from large companies, producer countries, rightwing parties and EU logging states.

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority more skeptical of green regulations.

"Additional intense pressure came from major export markets outside the EU," said corporate sustainability professor, implying the commission gave in to some requests during negotiations.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it rolled them back," said Schally. "Moving obligations to producers, it reduced accountability."

Business Frustration

The delays and changes have also caused frustration for companies that prepared in advance.

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

The Commission's Stance

An EU representative defended the outcome, saying: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

"The new text ensures stability, which is key for business and national regulators to successfully implement this very important regulation."