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Widely celebrated as a landmark regulation that would curb the global scourge of deforestation.

But, the final version of the EU's deforestation regulation, once touted as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, prompting criticism from its original architect and green lawmakers.

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

He warned that a reduced number of responsible companies, fewer data points, and less precise origin data would complicate the task of authorities.

Political Dismantling

Environmental MEP Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – including one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the hopes of over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans called it "the most ambitious legislation proposed to combat deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its green talk. The proposal encountered significant delays, reportedly over IT issues, which drew condemnation.

"By reopening this file instead of solving a technical issue, authorities invited political interference," remarked Toussaint.

In its first draft, the regulation required companies to trace goods back to their specific geographic origin using geolocation data, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in Brussels from multinational corporations, exporting nations, rightwing parties 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 has come from major export markets like the United States," noted corporate sustainability professor, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation features several critical weakenings:

• Downstream operators were largely freed from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," said the law's author. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

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

"We feel very annoyed because we put a lot of effort into preparing," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

A commission spokesperson defended the outcome, saying: "The commission has responded to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

"The revised regulation ensures stability, which is crucial for companies and national regulators to successfully implement this vitally important regulation."