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Widely celebrated as a pioneering regulation that would curb the global crisis of forest loss.

However, the final version of the European Union's deforestation regulation, once heralded as the crown jewel of the European Green Deal, has been passed in a significantly diluted state, prompting criticism from its initial author and environmental politicians.

"It has been gutted," said Hugo Schally, citing the exclusion of crucial requirements for later-stage companies to check the origin of commodities 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.

A Watered-Down Law

Green party vice-president Marie Toussaint was more blunt, 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 European citizens who signed a petition in 2020 calling for a prohibition of deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner the European commissioner called it "the most ambitious law ever put forward to fight deforestation."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its green talk. The proposal encountered 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 Toussaint.

In its first draft, the law required companies to trace commodities to their specific geographic origin using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and large financial penalties.

"This was not red tape for its own sake," the former official explained. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

Yet, the strict due diligence provoked opposition in the EU capital from multinational corporations, producer countries, conservative political groups and EU logging states.

Experts cite last year's EU elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

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

The Weakened Final Text

In the final legislation includes 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 “high risk” scrutiny.

"Rather than strengthening downstream obligations, it rolled them back," said Schally. "Moving obligations upstream, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

"We feel very annoyed because we invested significant resources into preparing," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

Official Defense

An EU representative defended the outcome, stating: "We have listened to feedback and acted to ensure a simple, fair and cost-efficient application."

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