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Widely celebrated as a landmark law that would curb the worldwide crisis of deforestation.

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

"It has been hollowed out," said the law's original author, pointing to the removal of key obligations for later-stage companies to check the provenance of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that fewer obligated actors, fewer data points, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Green party MEP a leading green politician went further, describing the delays, loopholes and exemptions – such as one for printed products – as the "systematic weakening" of the law.

This final text is a far cry from the demands of more than a million European citizens who signed a petition in 2020 calling for a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief Frans Timmermans trumpeted it as "the most ambitious law ever put forward to combat deforestation."

A Story of Dilution

The regulation's dilution is seen by critics as the European Union retreating from its green talk. It faced two major postponements, ostensibly over technical problems, which drew condemnation.

"By revisiting the legislation rather than fixing a technical issue, the commission opened Pandora’s box," remarked Toussaint.

Originally, the regulation required companies to trace goods to their specific geographic origin 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, established traceability, and stopped companies from hiding behind opaque production networks."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in the EU capital from large companies, producer countries, rightwing parties and member states with forestry industries.

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

"Additional intense pressure came from major export markets like the United States," said corporate sustainability professor, implying the EU yielded to some demands in trade talks.

The Weakened Final Text

In the final legislation features key dilutions:

• Retailers and traders were mostly exempted from submitting due diligence statements.
• A new “low risk” category was introduced.
• A window for further "simplifications" was opened for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Rather than strengthening downstream obligations, it stripped them back," lamented Schally. "By shifting responsibilities to producers, it reduced accountability."

Business Frustration

The protracted process and revisions have also caused frustration for companies that prepared in advance.

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

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

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