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It was a pioneering law that would help stop the worldwide scourge of deforestation.

However, the final version of the EU's deforestation regulation, once touted as the crown jewel of the European Green Deal, has been passed in a severely weakened state, prompting alarm from its original architect and environmental politicians.

"The regulation was gutted," stated the law's original author, pointing to the removal of crucial requirements for downstream traders to verify the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "systematic weakening" of the law.

This outcome is a far cry from the hopes of more than a million EU citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the most ambitious law ever put forward to fight deforestation."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. The proposal encountered two major postponements, reportedly over IT issues, which sparked criticism.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," commented Toussaint.

In its first draft, the law mandated that firms to track commodities back to their exact plot of land using GPS coordinates, making them liable 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 said. "These rules were the tool that ensured enforcement, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

However, the rigorous checks provoked opposition in Brussels from large companies, producer countries, rightwing parties and member states with forestry industries.

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority less favorable toward environmental rules.

"Additional intense pressure came from big trading partners like the United States," noted expert Andreas Rasche, suggesting the commission gave in to some demands in trade talks.

The Weakened Final Text

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 window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," said Schally. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we invested significant resources 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."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced application."

"The new text ensures stability, which is crucial for companies and national regulators to successfully implement this very important law."