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

However, the final version of the EU's anti-deforestation law, previously touted as the flagship policy of the European Green Deal, has been passed in a severely weakened state, prompting criticism from its original architect and green lawmakers.

"The regulation was stripped," stated Hugo Schally, pointing to the removal of crucial requirements for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and imprecise sourcing details would complicate the task of authorities.

A Watered-Down Law

Environmental MEP Marie Toussaint went further, labeling the postponements, exceptions and new loopholes – such as one for paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the demands of over 1.2 million EU citizens who signed a petition in 2020 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans trumpeted it as "the most ambitious legislation proposed to combat deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the European Union retreating from its green talk. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

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

In its first draft, the law 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.

"This was not red tape for its own sake," Schally 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, producer countries, conservative political groups and EU logging states.

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

"The other pressure has come from major export markets like the United States," said corporate sustainability professor, implying the commission gave in to some demands in trade talks.

The Weakened Final Text

The passed law features key dilutions:

• Retailers and traders were largely freed from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

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

Uncertainty for Companies

The delays and changes have also created annoyance for businesses that complied early.

"It is very frustrating because we invested significant resources into complying," said a coffee company executive. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a major letdown."

Official Defense

An EU representative defended the outcome, stating: "We have listened to feedback and taken action to ensure a simple, fair and cost-efficient application."

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