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

However, the final version of the EU's deforestation regulation, previously heralded as the crown jewel of the Green Deal, has been passed in a severely weakened state, prompting alarm from its initial author and green lawmakers.

"The regulation was gutted," said Hugo Schally, pointing to the exclusion of key obligations for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would make enforcement and prosecution more difficult.

Political Dismantling

Green party vice-president Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – including one for paper goods – as the "political dismantling" of the law.

This final text is a far cry from the demands of more than a million EU citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the most ambitious law proposed to combat forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the European Union retreating from its green talk. The proposal encountered two major postponements, reportedly over technical problems, which sparked criticism.

"By revisiting the legislation rather than fixing a simple IT problem, the commission opened Pandora’s box," remarked Toussaint.

In its first draft, the law required companies to trace goods to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with penalties and hefty fines.

"This was not red tape for its own sake," Schally explained. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

However, the strict due diligence provoked opposition in the EU capital from multinational corporations, producer countries, rightwing parties and EU logging states.

Experts cite last year's EU elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"Additional intense pressure has come 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 several critical weakenings:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was created.
• A option for more reductions was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," lamented Schally. "By shifting responsibilities upstream, it lessened the number of responsible firms."

Business Frustration

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

"It is very frustrating because we put a lot of effort into complying," stated a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

A commission spokesperson defended the outcome, stating: "We have listened to feedback and acted to ensure a simple, fair and cost-efficient application."

"The revised regulation ensures stability, which is key for business and competent authorities to effectively enforce this very important law."