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Originally hailed as a landmark law that would help stop the global crisis of deforestation.

But, the revised version of the EU's deforestation regulation, previously touted as the flagship policy of the Green Deal, has emerged in a significantly diluted state, prompting alarm from its original architect and environmental politicians.

"The regulation was hollowed out," said Hugo Schally, pointing to the removal of crucial requirements for later-stage companies to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that fewer obligated actors, fewer data points, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental vice-president a leading green politician went further, describing the delays, loopholes and exemptions – such as one for paper goods – as the "systematic weakening" of the law.

This final text stands in stark contrast to the hopes of more than a million European citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans called it "the toughest law proposed to combat deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its green talk. It faced two major postponements, reportedly over technical problems, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," remarked the Green MEP.

In its first draft, the law mandated that firms to track goods back to their specific geographic origin using GPS coordinates, making them liable for forest loss along their supply lines with penalties and large financial penalties.

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

Intense Lobbying

However, 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 European Parliament elections as a turning point, creating a new political majority more skeptical of green regulations.

"The other pressure came from major export markets outside the EU," noted corporate sustainability professor, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

In the final legislation features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new “low risk” category was introduced.
• A option for more reductions was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped them back," lamented Schally. "Moving obligations to producers, 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 invested significant resources into complying," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

Official Defense

A commission spokesperson supported the final law, saying: "The commission has responded to concerns 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 vitally important regulation."