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Widely celebrated as a pioneering piece of legislation that would combat the global scourge of deforestation.

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

"The regulation was gutted," stated Hugo Schally, citing the removal of crucial requirements for downstream traders to verify the origin of commodities like coffee, cocoa, beef, soy, palm oil, rubber and timber.

Schally cautioned that a reduced number of responsible companies, fewer data points, and less precise origin data would hinder monitoring and legal action.

A Watered-Down Law

Environmental vice-president Marie Toussaint was more blunt, labeling 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 demands of over 1.2 million EU citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

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

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, ostensibly over IT issues, which drew condemnation.

"By reopening this file instead of solving a simple IT problem, authorities invited political interference," remarked the Green MEP.

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

"This was not red tape for its own sake," Schally explained. "These rules were the tool that made the rules enforceable, created a verifiable paper trail, and stopped companies from hiding behind complex supply chains."

Intense Lobbying

However, the rigorous checks triggered a backlash in Brussels 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, creating a new political majority less favorable toward environmental rules.

"Additional intense pressure has come from big trading partners outside the EU," noted expert Andreas Rasche, suggesting the EU yielded to some requests during negotiations.

The Weakened Final Text

In the final legislation includes key dilutions:

• Downstream operators were mostly exempted from conducting rigorous checks.
• A new “low risk” category was created.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – geopolitical adversaries of the EU – will face the strictest monitoring.

"Instead of tightening downstream obligations, it stripped them back," said Schally. "Moving obligations 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 complying," stated Xavier Rombouts. "We invested in software, followed seminars and built a team... now they’re saying it could be altered again. It’s a big frustration."

The Commission's Stance

An EU representative defended the outcome, saying: "We have listened 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."