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It was a landmark regulation that would combat the worldwide crisis of deforestation.

But, the final version of the European Union's deforestation regulation, previously touted as the crown jewel of the European Green Deal, has been passed in a severely weakened state, leading to alarm from its initial author and environmental politicians.

"The regulation was gutted," said Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to verify the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would make enforcement and prosecution more difficult.

A Watered-Down Law

Green party 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 stands in stark contrast to the demands of more than a million EU citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

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

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 technical problems, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

In its first draft, the law required companies to track goods to their specific geographic origin using geolocation data, holding them accountable for forest loss along their supply lines with penalties and hefty fines.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in the EU capital from large companies, producer countries, rightwing parties and EU logging states.

Analysts point to last year's EU elections as a decisive moment, creating a new political majority less favorable toward green regulations.

"The other pressure has come from major export markets like the United States," noted corporate sustainability professor, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law includes key dilutions:

• Downstream operators were largely freed from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it rolled them back," lamented the law's author. "By shifting responsibilities to producers, it reduced accountability."

Business Frustration

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

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

Official Defense

An EU representative supported the final law, saying: "We have listened to feedback and taken action to ensure a simple, fair and cost-efficient application."

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