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It was a pioneering piece of legislation that would help stop the worldwide crisis of forest loss.

But, the revised version of the EU's deforestation regulation, once heralded as the flagship policy of the European Green Deal, has emerged in a significantly diluted state, leading to criticism from its initial author and environmental politicians.

"The regulation was gutted," stated Hugo Schally, citing 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.

He warned that a reduced number of responsible companies, less information collected, and less precise origin data would complicate the task of authorities.

Political Dismantling

Green party vice-president Marie Toussaint went further, describing the delays, loopholes and exemptions – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the demands of over 1.2 million European citizens who supported an initiative in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the toughest law proposed to fight deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the EU walking back its green talk. It faced significant delays, reportedly over technical problems, which sparked criticism.

"By revisiting the legislation instead of solving a technical issue, authorities invited political interference," remarked Toussaint.

In its first draft, the regulation mandated that firms to track commodities to their specific geographic origin using geolocation data, 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 made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, 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 environmental rules.

"The other pressure came from major export markets outside the EU," noted corporate sustainability professor, implying the commission gave in to some requests during negotiations.

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 created.
• A window for further "simplifications" was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it rolled them back," said Schally. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also created annoyance for companies that prepared in advance.

"It is very frustrating because we put a lot of effort into preparing," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

A commission spokesperson defended the outcome, stating: "We have listened to concerns and taken action to ensure a pragmatic and balanced implementation."

"The revised regulation provides for predictability, which is key for business and national regulators to successfully implement this vitally important regulation."