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Widely celebrated as a groundbreaking regulation that would combat the global scourge of forest loss.

However, the revised version of the European Union's anti-deforestation law, once touted as the crown jewel of the Green Deal, has been passed in a significantly diluted state, prompting alarm from its initial author and environmental politicians.

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

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Environmental MEP a leading green politician went further, describing the postponements, exceptions and new loopholes – such as one for paper goods – as the "political dismantling" of the law.

This outcome 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, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious legislation ever put forward to combat forest loss."

From Ambition to Compromise

The law's unravelling is seen by critics as the EU walking back its environmental promises. It faced significant delays, ostensibly over technical problems, which sparked criticism.

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

Originally, the law required companies to trace goods back to their exact plot of land using GPS coordinates, holding them accountable for deforestation in their supply chains with penalties 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 stopped companies from hiding behind complex supply chains."

Intense Lobbying

However, the rigorous checks triggered a backlash in the EU capital from large companies, exporting nations, conservative political groups and member states with forestry industries.

Analysts point to last year's European Parliament elections as a turning point, creating a new political majority more skeptical of environmental rules.

"The other pressure has come from major export markets outside the EU," said corporate sustainability professor, implying the EU yielded to some requests during negotiations.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it rolled them back," lamented Schally. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

The delays and changes have also caused frustration for businesses that complied early.

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

A commission spokesperson defended the outcome, stating: "The commission has responded to concerns and taken action to ensure a pragmatic and balanced implementation."

"The new text ensures stability, which is key for business and national regulators to effectively enforce this vitally important law."