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It was a groundbreaking law that would combat the worldwide scourge of forest loss.

However, the final version of the EU's deforestation regulation, once touted as the crown jewel of the Green Deal, has emerged in a significantly diluted state, leading to alarm from its initial author and environmental politicians.

"It has been stripped," stated the law's original author, pointing to the exclusion of crucial requirements for later-stage companies to verify the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that fewer obligated actors, less information collected, and imprecise sourcing details would complicate the task of authorities.

Political Dismantling

Green party 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 outcome is a far cry from the demands of over 1.2 million EU citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

When launched in 2021, then-Green Deal commissioner the European commissioner called it "the toughest legislation proposed to fight deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its environmental promises. The proposal encountered two major postponements, reportedly over IT issues, which sparked criticism.

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

Originally, the regulation mandated that firms to track commodities back to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with criminal charges and large financial penalties.

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

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from large companies, exporting nations, rightwing parties and EU logging states.

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

"Additional intense pressure has come from major export markets outside the EU," said expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Rather than strengthening downstream obligations, it rolled them back," said Schally. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for businesses that complied early.

"We feel very annoyed because we put a lot of effort into complying," said Xavier Rombouts. "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

An EU representative defended the outcome, saying: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced implementation."

"The new text ensures stability, which is key for business and competent authorities to effectively enforce this vitally important law."