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Widely celebrated as a landmark regulation that would help stop the global scourge of forest loss.

But, the revised version of the European Union's deforestation regulation, previously touted as the crown jewel of the European Green Deal, has emerged in a severely weakened state, leading to criticism from its original architect and environmental politicians.

"It has been hollowed out," stated the law's original author, citing the exclusion of crucial requirements for downstream traders to verify the provenance of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

A Watered-Down Law

Green party MEP Marie Toussaint was more blunt, labeling the postponements, exceptions and new loopholes – including one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the hopes of over 1.2 million EU citizens who supported an initiative in 2020 demanding a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief Frans Timmermans called it "the most ambitious law ever put forward to combat deforestation."

A Story of Dilution

The regulation's dilution has been interpreted as the EU walking back its environmental promises. The proposal encountered two major postponements, ostensibly over IT issues, which sparked criticism.

"By reopening this file instead of solving a technical issue, authorities invited political interference," remarked Toussaint.

In its first draft, the regulation mandated that firms to track goods to their exact plot of land using geolocation data, holding them accountable for deforestation in their supply chains with penalties and hefty fines.

"This was not red tape for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Mounting Pressure

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

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power less favorable toward green regulations.

"The other pressure has come from big trading partners like the United States," said corporate sustainability professor, implying the commission gave in to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," lamented Schally. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also caused frustration for companies that prepared in advance.

"We feel very annoyed because we invested significant resources 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 major letdown."

The Commission's Stance

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

"The new text ensures stability, which is key for business and competent authorities to effectively enforce this vitally important regulation."