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Widely celebrated as a landmark regulation that would help stop the global scourge of forest loss.

However, the final version of the EU's deforestation regulation, previously touted as the crown jewel of the Green Deal, has been passed in a significantly diluted state, leading to alarm from its initial author and green lawmakers.

"The regulation was hollowed out," said the law's original author, citing the exclusion of crucial requirements for downstream traders to check the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

A Watered-Down Law

Environmental MEP a leading green politician was more blunt, labeling the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the hopes of over 1.2 million European citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, the EU's climate chief the European commissioner called it "the most ambitious law ever put forward to fight forest loss."

A Story of Dilution

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 rather than fixing a technical issue, authorities invited political interference," remarked the Green MEP.

In its first draft, the regulation required companies to trace goods to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official said. "It was the mechanism that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

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

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

"The other pressure has come from major export markets outside the EU," said corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law 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 established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

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

Business Frustration

The protracted process and revisions have also caused frustration for businesses that complied early.

"It is very frustrating because we invested significant resources into complying," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

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

"The revised regulation ensures stability, which is crucial for companies and competent authorities to effectively enforce this vitally important regulation."