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Originally hailed as a groundbreaking regulation that would combat the global crisis of forest loss.

However, the final version of the EU's anti-deforestation law, once heralded as the flagship policy of the Green Deal, has been passed in a significantly diluted state, prompting criticism from its original architect and environmental politicians.

"It has been gutted," stated Hugo Schally, pointing to the exclusion of key obligations for downstream traders to verify the origin of products like coffee, cocoa, beef, soy, palm oil, rubber and timber.

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

A Watered-Down Law

Green party MEP Marie Toussaint went further, describing the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This outcome is a far cry from the hopes of over 1.2 million European citizens who signed a petition in 2020 calling for a ban on deforestation-linked products.

At its launch in 2021, the EU's climate chief the European commissioner called it "the most ambitious law proposed to fight forest loss."

A Story of Dilution

The law's unravelling has been interpreted as the EU walking back its green talk. The proposal encountered significant delays, ostensibly over technical problems, which sparked criticism.

"By reopening this file rather than fixing a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

Originally, the regulation mandated that firms to trace commodities to their exact plot of land using geolocation data, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

However, the rigorous checks triggered a backlash in the EU capital from multinational corporations, producer countries, rightwing parties and EU logging states.

Analysts point to last year's European Parliament elections as a decisive moment, shifting the balance of power more skeptical of environmental rules.

"Additional intense pressure has come from big trading partners like the United States," noted expert Andreas Rasche, suggesting the commission gave in to some requests during negotiations.

Key Loopholes Introduced

The passed law includes key dilutions:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new exemption for small operators was created.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face “high risk” scrutiny.

"Rather than strengthening rules for companies, it stripped them back," said the law's author. "By shifting responsibilities to producers, it lessened the number of responsible firms."

Business Frustration

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

"It is very frustrating because we invested significant resources into preparing," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it may be changed. It’s a big frustration."

Official Defense

An EU representative supported the final law, stating: "The commission has responded to feedback and acted to ensure a pragmatic and balanced application."

"The new text provides for predictability, which is crucial for companies and national regulators to successfully implement this vitally important law."