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Originally hailed as a landmark piece of legislation that would combat the global crisis of forest loss.

But, the revised version of the European Union's deforestation regulation, once heralded as the crown jewel of the Green Deal, has been passed in a significantly diluted state, prompting alarm from its initial author and green lawmakers.

"It has been stripped," said Hugo Schally, citing the removal of key obligations for later-stage companies to check the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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

A Watered-Down Law

Environmental vice-president a leading green politician went further, describing the delays, loopholes and exemptions – such as 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 European citizens who supported an initiative in 2020 demanding a ban on deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the toughest legislation proposed to combat forest loss."

A Story of Dilution

The law's unravelling is seen by critics as the EU walking back its green talk. The proposal encountered two major postponements, ostensibly over technical problems, which drew condemnation.

"By reopening this file rather than fixing a technical issue, authorities invited political interference," remarked the Green MEP.

Originally, the regulation required companies to track commodities back to their specific geographic origin 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 explained. "It was the mechanism that ensured enforcement, established traceability, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, producer countries, conservative political groups and EU logging states.

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority more skeptical of green regulations.

"Additional intense pressure came from big trading partners like the United States," noted corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features several critical weakenings:

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

"Instead of tightening downstream obligations, it stripped them back," lamented Schally. "Moving obligations upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into complying," stated 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 major letdown."

The Commission's Stance

A commission spokesperson supported the final law, saying: "The commission has responded to feedback and acted to ensure a pragmatic and balanced implementation."

"The new text provides for predictability, which is crucial for companies and competent authorities to successfully implement this very important regulation."