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

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

"It has been gutted," stated Hugo Schally, pointing to the exclusion of key obligations for downstream traders to verify the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and less precise origin data would complicate the task of authorities.

Political Dismantling

Green party MEP a leading green politician was more blunt, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This final text stands in stark contrast to the demands of more than a million EU citizens who signed a petition in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, then-Green Deal commissioner Frans Timmermans called it "the most ambitious law proposed to combat deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the European Union retreating from its green talk. The proposal encountered significant delays, ostensibly over technical problems, which drew condemnation.

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

In its first draft, the regulation required companies to trace goods to their exact plot of land using geolocation data, making them liable 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 made the rules enforceable, established traceability, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

However, the rigorous checks provoked opposition in Brussels from multinational corporations, producer countries, rightwing parties and EU logging states.

Analysts point to last year's EU elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," said expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation features key dilutions:

• Retailers and traders 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 – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," said the law's author. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Business Frustration

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 invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, saying: "We have listened to feedback and taken action to ensure a simple, fair and cost-efficient implementation."

"The revised regulation provides for predictability, which is crucial for companies and national regulators to successfully implement this very important regulation."