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It was a landmark regulation that would combat the worldwide scourge of deforestation.

But, the final version of the EU's anti-deforestation law, previously touted as the crown jewel of the European Green Deal, has emerged in a severely weakened state, leading to criticism from its original architect and green lawmakers.

"The regulation was stripped," stated Hugo Schally, pointing to the exclusion of key obligations for later-stage companies to verify the provenance of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

He warned that fewer obligated actors, less information collected, and imprecise sourcing details would hinder monitoring and legal action.

A Watered-Down Law

Green party MEP a leading green politician went further, labeling the postponements, exceptions and new loopholes – such as one for printed products – as the "political dismantling" of the law.

This outcome stands in stark contrast to the hopes of over 1.2 million EU citizens who supported an initiative in 2020 calling for a prohibition of deforestation-linked products.

When launched in 2021, the EU's climate chief the European commissioner trumpeted it as "the toughest law ever put forward to fight forest loss."

A Story of Dilution

The regulation's dilution has been interpreted as the European Union retreating from its green talk. The proposal encountered two major postponements, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation instead of solving a simple IT problem, authorities invited political interference," commented the Green MEP.

In its first draft, the law mandated that firms to track goods to their exact plot of land using GPS coordinates, holding them accountable 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 prevented firms from obscuring their activities behind complex supply chains."

Intense Lobbying

Yet, the strict due diligence triggered a backlash in the EU capital from multinational corporations, exporting nations, conservative political groups and EU logging states.

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

"The other pressure has come from major export markets like the United States," noted corporate sustainability professor, suggesting the EU yielded to some demands in trade talks.

Key Loopholes Introduced

The passed law features key dilutions:

• Downstream operators were largely freed from conducting rigorous checks.
• A new “low risk” category was introduced.
• A window for further "simplifications" was established for next spring.
• Only four countries – geopolitical adversaries of the EU – will face “high risk” scrutiny.

"Instead of tightening rules for companies, it stripped them back," lamented Schally. "Moving obligations to producers, it reduced accountability."

Uncertainty for Companies

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

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

The Commission's Stance

A commission spokesperson defended the outcome, stating: "The commission has responded to concerns and acted to ensure a pragmatic and balanced application."

"The revised regulation provides for predictability, which is key for business and national regulators to successfully implement this very important law."