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It was a groundbreaking piece of legislation that would help stop the global crisis of forest loss.

But, the final version of the European Union's deforestation regulation, once heralded as the crown jewel of the European Green Deal, has emerged in a significantly diluted state, leading to alarm from its original architect and green lawmakers.

"The regulation was stripped," stated Hugo Schally, pointing to the exclusion of key obligations for downstream traders to check the provenance of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that fewer obligated actors, less information collected, and imprecise sourcing details would complicate the task of authorities.

Political Dismantling

Environmental vice-president Marie Toussaint was more blunt, describing the delays, loopholes and exemptions – including one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the demands of over 1.2 million European citizens who signed a petition in 2020 calling for a ban on deforestation-linked products.

When launched in 2021, then-Green Deal commissioner the European commissioner trumpeted it as "the toughest legislation proposed to fight forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. The proposal encountered significant delays, reportedly over IT issues, which drew condemnation.

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

Originally, the regulation required companies to trace commodities back to their exact plot of land using GPS coordinates, making them liable for forest loss along their supply lines with criminal charges and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official said. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind opaque production networks."

Mounting Pressure

However, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, conservative political groups and EU logging states.

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

"The other pressure came from major export markets like the United States," said corporate sustainability professor, implying the commission gave in to some requests during negotiations.

The Weakened Final Text

In the final legislation includes key dilutions:

• Downstream operators were largely freed from conducting rigorous checks.
• A new exemption for small operators was introduced.
• A option for more reductions was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening rules for companies, it stripped them back," said Schally. "Moving obligations upstream, 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 invested significant resources into preparing," said a coffee company executive. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a major letdown."

The Commission's Stance

An EU representative defended the outcome, stating: "We have listened to concerns and acted to ensure a pragmatic and balanced application."

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