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It was a groundbreaking regulation that would curb 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 Green Deal, has emerged in a severely weakened state, prompting criticism from its initial author and green lawmakers.

"It has been hollowed out," stated the law's original author, citing the removal of crucial requirements for downstream traders to verify 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 complicate the task of authorities.

A Watered-Down Law

Environmental vice-president Marie Toussaint went further, labeling the delays, loopholes and exemptions – such as one for paper goods – as the "systematic weakening" of the law.

This final text is a far cry from the hopes 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, then-Green Deal commissioner the European commissioner trumpeted it as "the most ambitious law ever put forward to fight forest loss."

From Ambition to Compromise

The regulation's dilution is seen by critics as the EU walking back its environmental promises. The proposal encountered significant delays, reportedly over IT issues, which sparked criticism.

"By reopening this file instead of solving a simple IT problem, authorities invited political interference," commented Toussaint.

In its first draft, the law mandated that firms to trace commodities back to their specific geographic origin using GPS coordinates, making them liable for forest loss along their supply lines with penalties and large financial penalties.

"It wasn't bureaucracy for its own sake," the former official explained. "It was the mechanism that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

Yet, the rigorous checks provoked opposition in Brussels from multinational corporations, producer countries, conservative political groups and member states with forestry industries.

Analysts point to last year's EU elections as a decisive moment, shifting the balance of power more skeptical of green regulations.

"The other pressure came from big trading partners outside the EU," said expert Andreas Rasche, implying the commission gave in to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were mostly exempted from submitting due diligence statements.
• A new exemption for small operators 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 rolled them back," said Schally. "By shifting responsibilities upstream, it reduced accountability."

Business Frustration

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

"We feel very annoyed because we put a lot of effort into complying," said Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it could be altered again. It’s a big frustration."

Official Defense

An EU representative defended the outcome, saying: "We have listened to feedback and taken action to ensure a pragmatic and balanced application."

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