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Widely celebrated as a groundbreaking regulation that would curb the worldwide crisis of deforestation.

However, the final version of the European Union's anti-deforestation law, previously heralded as the flagship policy of the Green Deal, has been passed in a significantly diluted state, leading to alarm 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 downstream traders to check the origin of commodities like palm oil, soy, wood, beef, rubber, cocoa and coffee.

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 Marie Toussaint went further, describing the delays, loopholes and exemptions – including 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 demanding a prohibition of goods linked to forest destruction.

At its launch in 2021, the EU's climate chief the European commissioner trumpeted it as "the toughest legislation proposed to fight deforestation."

A Story of Dilution

The law's unravelling is seen by critics as the European Union retreating from its green talk. It faced two major postponements, reportedly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, the commission opened Pandora’s box," remarked the Green MEP.

In its first draft, the regulation required companies to trace commodities back to their exact plot of land using geolocation data, holding them accountable 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 explained. "These rules were the tool that ensured enforcement, established traceability, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

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

Analysts point to last year's European Parliament elections as a decisive moment, creating a new political majority less favorable toward green regulations.

"Additional intense pressure came from big trading partners outside the EU," noted expert Andreas Rasche, implying the commission gave in to some requests during negotiations.

The Weakened Final Text

In the final legislation includes several critical weakenings:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A option for more reductions was established 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," lamented the law's author. "Moving obligations to producers, it lessened the number of responsible firms."

Uncertainty for Companies

The delays and changes have also created annoyance for companies that prepared in advance.

"We feel very annoyed because we invested significant resources into complying," said Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a major letdown."

The Commission's Stance

A commission spokesperson supported the final law, saying: "We have listened to feedback and taken action to ensure a simple, fair and cost-efficient application."

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